I have recently started studying the system dynamics course taught by Professor John Sterman at MIT. https://ocw.mit.edu/courses/15-871-introduction-to-system-dynamics-fall-2013/.
Introduction to John Sterman
John D. Sterman is the Jay W. Forrester Professor of Management at the MIT Sloan School of Management. He also serves as the director of the MIT System Dynamics Group and the MIT Sloan Sustainability Initiative.
His research focuses on improving decision-making in complex systems, covering areas such as corporate strategy, energy policy, public health, environmental sustainability, and climate change. Professor Sterman has also pioneered "management flight simulators" that simulate the dynamics of businesses and economic systems, which are widely used by companies, universities, and government agencies around the world.
He holds a bachelor’s degree in Engineering and Environmental Systems from Dartmouth College and a Ph.D. in System Dynamics from MIT.
Why do we need system dynamics and systems thinking?
Despite the continuous growth of human intelligence and analytical capabilities, the problems we face are becoming increasingly complex. And our
We are often surrounded by various pressures.
When we make a decision, things may seem to improve;
However, side effects often tend to appear.
Why does this happen? And why is this phenomenon so frequent?
Linear thinking.
systems, meaning systems with feedback.
In systems thinking, decision-making is not a one-way process but a cycle: we make decisions — these decisions alter the environment — the environment provides new feedback — we adjust our next decision based on this information. Through such an iterative approach, we move forward step by step.
Therefore, knowing just the destination is far from enough; it's also necessary to understand where the starting point is in order to make effective decisions. Systems dynamics and systems thinking are precisely the key tools that help us deal with these complex feedback systems.
Decision-making in business
are omnipresent. Each decision may bring side effects, and multiple stakeholders inside and outside the company also face their own limitations. Their behaviors and decisions can similarly generate other side effects.
Our thinking is always limited, biased, and imperfect. Although all models will have errors or limitations, they can help us gain deeper insights into complex systems. In this process, we can enhance our cognition through models, thereby utilizing these insights to develop more effective strategies and drive real change.
The value of a model does not lie in its absolute correctness, but in its ability to provide us with a clearer framework for thought, enabling us to better understand complex business environments and make wiser decisions.
The foundation of systems thinking
The structure of a complex system determines its behavior, and this structure includes the following aspects:
Physical laws (physics) Available information Decision rules from information to behavior
Although mental models are important, they also have their limitations:
It is not enough to find the correct answers to all questions. It cannot alter the physical laws within the system. It cannot change the system for transmitting and processing information. It cannot fundamentally change the users' incentive mechanisms (incentives).
Fundamental Attribution Error (FAE)
low leverage behavior often fails to effectively solve problems because it does not identify and adjust the critical factors within the system.