Systems Design and Business Dynamics Course Overview Starting Point: What is a system? Focus: Why dynamics? Thinking and Analysis: What is the nature of a structural hypothesis? End Point: Why design? What is a system? A collection of things (elements) with interconnections in such a way that it is able to produce identifiable characteristic behaviors over time as it fulfills a function. What business dynamics? Patterns are our interest (dynamic bull whip patterns such as in the beer game; boom and bust of housing) Thinking and Analysis (What is a mental model?) A mental model is a set of assumptions about how a systems works that we use to: Hypothesize about the cause of a systems behaviors; Mentally consider what will happen if left unaltered; Critically consider how to alter for improved performance Become the basis for a simulation model, if needed Why design? We use our mental models and simulations to sanity check strategies and implementations and then use that understanding to consider new policies, metrics, decision rules, etc. for allocating resourse that change the inflows/outflows =>that change the stocks J.A. Van Mieghem/Operations/Strategy

Systems Design and Business Dynamics: Why should you be here? You will gain a basic understanding and working knowledge of systems thinking fundamentals: performance patterns thinking, stock-flow mapping, causal loop diagramming, archetype stories. You will gain an appreciation and insight into putting systems thinking into personal and organizational action to pinpointing leverage points and design improved system performance. Bottom line: You will be better prepared to contribute to your future organization’s ability to see into complexity and offer meaningful facilitation and conversational skills to help others understand systems structure effective systems redesign policies Few MBAs have this elective content available J.A. Van Mieghem/Operations/Strategy

Systems Design and Business Dynamics: Studying Complex Problems Operational Thinking; stocks & flows mapping (Class 1-4 ) How does the system really work? System as Cause & Examining decision policies ”ithink” software: mapping and simulation Closed-loop thinking: feedback loops Two Basic Feedback Loops Class 1 and 2 Causal Loop Mapping: Class 5 Systems Archetypes: Class 6 Systems Design Applications Analyses and Simulations (Cls 1-15) Practice analysis and design skills involving dynamic behavior, why it occurs, and how we can find high leverage changes and new systems designs to understand and improve Business growth dynamics management Improvement management Consulting practice dynamics Managing out of addiction Turnaround Strategy Design and Implementation Performance metrics design Natural resources sustainability J.A. Van Mieghem/Operations/Strategy

Systems Design and Business Dynamics: Announcements ithink software: See Course Description Web Site & isee systems memo Use DISCOUNT CODE UVA2010 Need ithink 9.1.4 for use in Class #2 October 15 preparations A good deal; required for the course and very useful elsewhere Please have on your laptop ithink download ready by Thursday, Class #1 (10/14); we will briefly examine the software. GBUS8430 web site and course folder Will be used to deliver some course materials (In-class assignments and software models) J.A. Van Mieghem/Operations/Strategy

Systems Design and Business Dynamics: Running Rules for the Sessions Be here for all sessions Sit in same seats or near same seats Minimize disruptions cell phones off, leaving the room, arriving after class starts using laptop for non-SD & BD learning activity Absences—prior notification, if possible; know the grade consequences of absences Mutual professional respect (students, faculty, guests) J.A. Van Mieghem/Operations/Strategy

Systems Design and Business Dynamics: Course Grading Class Contribution: 50% of grade Attendance: no more than 2 un-excused in our 15 sessions; otherwise Low Performance (max grade) in class participation. Daily: we will record attendance and observe contributions An announced individual assignment (s) relative to class preparations Course Comprehensive Assignment: 50% of grade Six-person group; systems thinking assignment; calling upon the major frameworks, thinking skills and tools of the course Group Formation PRocess---look for an email on Friday 10/15/10 J.A. Van Mieghem/Operations/Strategy

Systems Design and Business Dynamics Planning Ahead Requests Individual and Group Deliverables for 4 Several Class Workshops and the Course Project (due 12/10/10) Required, Individual Turn–in Assignment: Nov 4 100% Attendance Required on Nov 4; see me if a problem Extended Class until 2:20 pm on Nov 10 Required, Individual Turn–in Assignment: December 2 100% Attendance Required on Dec 2 and 3; see me if a problem J.A. Van Mieghem/Operations/Strategy

Systems Thinking Perspective - A Shift of Mind Operational thinking: How does the system really work? Uses stock-flow maps to operationalize (make explicit) one’s mental model and highlight information flows, delays and decision policies. Closed loop thinking: looking for circles of causality rather than linear cause-effect chains to develop and communicate a mental model of causality structure (a feedback structure) System as Cause thinking: What is generating the performance pattern? (boundary of causes) Dynamic thinking: Seeing time-based patterns of change rather than snap-shots/events.