Conversational Systems Thinking The power of group engagement

Conversational Systems Thinking The power of group engagement with the rigor of system dynamics…for less!

Purpose • To describe a set of skills and an approach that can improve the quality of thinking…about just about anything…without requiring computer simulation

Agenda • • • Overview Seven Skills Value Add Leverage Points Q&A

Acknowledgements • I have had the honor to work with several inspirational systems thinkers w Barry Richmond § First articulated Seven Thinking Skills § First coined term Conversational Systems Thinking w Dana Meadows § Developer of Leverage Points concepts w Steve Peterson § Continues to push these ideas forward § Paper Barry Richmond, System Dynamics and Public Policy is a great example

Continuum from Archetype/CLD ST to Computer-Facilitated SD Archetype/CLD ST • Easy to Learn • Nearly anyone can write it • Some systemic insights but can be too generic • Mostly right brain • Sexy Computer-Facilitated SD • Possible to Learn • Somewhat limited • More rigorous and more unique systemic insights • Broad appeal - left/right brain • Years to Learn • limited to few • Most rigorous and unique systemic insights • Heavy left brain • Geeky

Barry Richmond’s Value per Effort graph Value Derived Complex model Big honkin’ model! Foc us o f CS T Simple model Simple stock/flow map Conversational use of skills Effort/Time Required • A lot of clarity can be derived with little time and effort, simply by conversational application of (operational) systems thinking

Venn Diagram Build Complex Models 2% Apply Conversational Systems Thinking Skills 95 -100% • • Build Simple Maps 40 -50% Build Simple Models 15 -20% A majority of the population (e. g. in organization or policy discussion…dare I say in the population!) can learn and apply Conversational Systems Thinking They would become better participants (consumers and contributors) to strategy and policy processes

About the Current Age "I wish it need not have happened in my time, " said Frodo. "So do I, " said Gandalf, "and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us. ” -J. R. R. Tolkien One crucially important thing we can do with the time given us is to increase our systems thinking capacity and of those around us.

Seven Thinking Skills Overview

Seven Thinking Skills of a Systems Thinker* *Barry Richmond

7 ST Skills Mindset & Approach Representing Assumptions Framing Issues Contrasting CST with Simulation SD Skill Conversational Computer Supported Dynamic Agreeing on issue, over time, scale of time concerned Ditto 30, 000 Foot (Forest) Expanding boundary of focus, determining appropriate sectors Ditto System as Cause Focusing on how system generates its own performance, not relying on exogenous causes for behavior Ditto Operational Building a mental model that represents causality, using stock/flow maps to represent, may or may not need generic templates to get at essence of activities Use computer simulation to test plumbing, will use generic templates to specify flows Closed-loop Closing feedback loops, removing free lunches. Can do so with connector arrows. In CST will link feedback loops through stock/flow structure to see implications on accumulations. Cannot determine loop dominance. Use computer simulation to test loop validity and determine dominance. Quantitative Include non-physical determinants of behavior. Ensures mental model doesn’t exclude what’s unmeasurable but important. Need to specify range and build structure to numerate non-physical. Often requires lots of selling to stakeholders! Scientific Use a build confidence in analysis (map if done) approach. Not proving truth. Ditto, but building confidence in simulations and results.

The Skills Part 1 Framing the Issue

Dynamic Thinking • • • Move from event to over-time perspective Power of group agreement on “what’s happening” I usually get individuals to sketch out…then have small groups discuss, integrate and prioritize Profit (in Millions of $) “Much Longer Time Horizon” Lens 20 “Longer Time Horizon” Lens “Short Time Horizon” Lens 0 -20 “Here & Now” Lens Years

Dynamic Thinking Don’t only look back! • Very interesting discussions can occur when asking to project how long it will take to achieve some objective. Revenue Let’s double revenue! How will that occur? 20 Different curves represent different mental models that can be brought to the light of day! 10 0 Years

Dynamic Thinking Malnutrition (Peru) • • Here the behavior of interest is… Why have improvements in reducing malnutrition stopped!? Understanding why it worked for a while and why it’s stopped can lead to more systemic conversations More than one of every four children under the age of five suffer from chronic malnutrition in Peru. After steady advances, progress in addressing the problem essentially came to a halt – despite roughly $300 million a year devoted to resolving the problem.

30, 000 Foot (Forest) Thinking • • • Boundary expansion One way to avoid unintended consequences or poor projections Example: Oil Production w Top map projects oil production solely on production infrastructure w Second includes finite resource, price and the impact on demand (consumption infrastructure) Production Infrastructure Supply Consumption Infrastructure Demand Price

30, 000 Foot (Forest) Thinking Tips • Resist the temptation to “dive into” everything you know about a part of the issue in any one sector until you’ve captured the 30, 000 foot view • Use Sector Frames to help categorize • Expand boundary by questioning clouds in a stock/flow map

The Skills Part 2 Representing the Mental Model

Operational Thinking • The stock/flow language is the operational language of Conversational Systems Thinking • It becomes a great framework for… w Representing the main chain (core infrastructure) w Determining the essence of how activities are generated (stock vs. flow) w Identifying levers through generic templates

Main Chains (or Core Infrastructures) Examples of stock/flow maps Treatment Capacity Financials Population Health Workforce Development Personal Health Habits

Main Chains (or Core Infrastructures) An example from the CDC was mandated by Congress with two measurable goals re: diabetes policy… 1. Rate of diagnosing diabetes 2. Reducing Prevalence 3. Reducing deaths (dying) What do you think of this strategy? Sufficient? 1 2 3 Turns out these goals are incongruent! Prevalence & deaths (measurable) must increase if diagnosing increases!

Main Chains (or Core Infrastructures) Homework for Session 3: Map the expenditure An Example from working with GA Legislators a. Map current or desired initiatives onto main chain Proposed/ Current Expenditure c. d. b. Impacts flow (a-d) Why? How long till impact seen? Why? Potential Unintended Consequences School fitness programs a&b Develops healthy behaviors in students; prevents the onset of obesity Most visible after 20 -40 years. Takes till that long until students reach “complications” ages Funding from other programs …. …. … …

Main Chains Tips • Although you can map non-physical, it’s likely best to make core infrastructure physical • A structure mapping the building Support for a program at Boeing becomes a chain of Advocates and Resistants • Non-physical variables can then drive these more physical flows

Activity (Flow) Generation • Understanding whether a flow is generated primarily from a stock or flow can lead to insights in where focus has been and what might be done • Have conversations with stakeholders regarding the essence of how something is generated

Activity (Flow) Generation Generic Templates • Stock-based w w Resource Compounding Draining Gap-adjustment • Flow-based Resource Gap-adjustment Compounding Draining w Co-flow Using generic templates helps identifies levers

Example: Auto manufacturer Strategy to reduce auto-related fatalities Features by automakers to reduce fatalities can reduce: • Accident probability • Fatality probability Co-flows External resource • • But can also reduce: • Autos (UIO) • Miles driven (VMT) Manufacturer classified initiatives as active vs. passive Turns out using generic templates made it easier to classify

Closed-Loop Thinking • Showing feedback loops that drive changes in dynamics w Reinforcing w Counteracting (Balancing) • Can do so just as well in stock/flow maps… • And you don’t lose the main chain nor levers identified s Limit to Growth Balancing Loop s Supply Balancing Loop Demand Balancing Loop o s s s Can do with/without generic templates o

Healthy and Chronic Population discussion CST Exercise with GA Legislators Reinforcing Loop • Current treatment strategies might create a vicious cycle (Reinforcing Loop) w • More demand & spending for treatments on the Chronic Population means less spending on the At Risk Population means more Chronic Population needing treatments) What might be the most effective way to limit this loop’s impact?

The Skills Part 3 Framing the Issue

Scientific Thinking Process Observe/Identify Issues • In applying CST use same confidence building process you would with a model w Building confidence not proving truth Build/Revise Causal Theory • • • Develop/Test Strategies • • Communicate & Disseminate Solutions & Insights Iterate through applying skills Revisit reference behavior When building maps start small - core infrastructure Best if core infrastructure is physical Add a piece of structure, discuss implications, revise and add from there

Value Add in Practice

Pulls out concept of systemic orchestration • Operational strategy maps identify where systemic orchestration will determine strategic effectiveness • Knowing timing and magnitude is just as important as knowing levers! 6 month delay 3 year delay

Identify Unintended Consequences Rigorous approach to improving mental models Policy Question How can we reduce the number of people dying with AIDs? Expanding boundaries leads to… If our primary strategy is to develop interventions that increase the lifespan of the Infected Population, what will happen to the rate of “dying” over time? Annual deaths Years

Able to Identify Leverage Points • Conversational Systems Thinking – because it applies stocks and flows – allows better analysis using Donella Meadow’s “places to intervene in a system” framework • Her list of leverage points (next page) works from constants (e. g. productivity terms) down to rules and mindsets that determine the system • CST allows you to examine the gamut of her list

Identifying Policies Places to Intervene in a system* In order of increasing effectiveness 12. Constants, parameters, numbers (such as subsidies, taxes, standards) 11. The sizes of buffers and other stabilizing stocks, relative to their flows 10. The structure of material stocks and flows (such as transport networks, population age structures) 9. The length of delays, relative to the rate of system change 8. The strength of negative feedback loops, relative to the impacts they are trying to correct against 7. 6. 5. 4. 3. 2. 1. The gain around driving positive feedback loops The structure of information flows (who does and does not have access to what kinds of information) The rules of the system (such as incentives, punishments, constraints) The power to add, change, evolve, or selforganize system structure The goals of the system The mindset or paradigm out of which the system - its goals, structure, rules, delays, parameters - arises The power to transcend paradigms *Donella Meadows, Sustainability Institute and author of The Global Citizen http: //www. sustainer. org By using CST, you can more easily explore implications of policies with regard to leverage

Summary Dana Meadows said: We have just enough time… starting now!

A Brief Bibliography Resource Author/Publisher Notes Seven Thinking Skills Barry Richmond, Pegasus Communications (2000) Introduced concept of sevent thinking skills. Excellent resource guide. Introduction to Systems Thinking Barry Richmond, iseesystems (2002) Extremely accessible work produced by one of the leading lights of the field. Strategic Modelling and Business Dynamics John Morecroft, Wiley Press (2007) One of the most accessible modeling books. Perhaps too business-y for the layperson. The Strategic Forum Chris Soderquist, Berrett-Koehler (2000) Description of using modeling for strategic planning The Systems Thinker Newsletter Pegasus Communications www. pegasuscom. com Newsletter format. Broad range of topics covered. Rigor of treatment varies. Pegasus website is a clearinghouse for a host of dynamic modeling/system dynamics/systems thinking resources. Operational Strategy Mapping Soderquist, C. and Shimada, M. , Pegasus Communications Feature article on using strategy mapping at Boeing The Fifth Discipline Peter Senge, Doubleday (1994) Qualitative treatment of broad array of dynamic modeling skills and topics. Popularized “systems thinking” approach. Many follow-on “field books” published over the years. Industrial Dynamics Jay Forrester, Pegasus Communications, (1961) Classic book on system dynamics, written by the founder of the field.