1. System Dynamics and the O-O-D-A Maneuver
Winning Through
Software(Explicit) Competence
And
Intuitive(Implicit) Competence
Clarence J. Maday
Professor Emeritus
Mechanical and Aerospace Engineering
North Carolina State University
CJMaday 2012

2. MOTIVATION
Here is my current view on the unification of the many flavors of the month in the business and management literature. . All of them can be regarded an subsets of Systems Dynamics and Boyd’s OODA Maneuver. For completeness I add Goldratt’s thought processes for change management. Of course, change management can be seen as a subset of System Dynamics. Donnella H. Meadows emphasizes the dynamics of change. She brings together the disparate views of systems. In her ‘Thinking in Systems’ she opens with a 1979 quote from Russell Ackoff:”Managers are not confronted with problems that are independent of each other, but with dynamic situations that consist of complex systems of changing problems that interact with each other. I call such situations messes…. Managers do not solve problems, they manage messes.” I suggest that Ackoff’s managers were not fluent with Forrester’s Industrial Dynamics (1961).The work of Forrester, Sterman and, more recently, Boyd brings order to these “messes”. See especially Sterman’s Business Dynamics and the archived journals of the Systems Dynamics Society.
I’ve minimized the Cynefin Framework content….it’s a subset of the OODA maneuver.
I recommend Chet Richards web site, Fast Transients. The name is most appropriate.
Change is a dynamic process as seen in OODA and Systems Dynamics, both supported by Newton’s Calculus and “Laws” of Motion.
CJMaday
2012

3. SUGGESTED PROTOCOL
1. STATE GOAL(S) -- MAY BE TIME DEPENDENT -- SHORT TERM AND LONG TERM
2. MODEL THE SYSTEM (INTUITIVE OR DIGITAL), APPLY O – O – D -- A
3. SIMULATE
4. MEASURE THE STATE; CASH, MATERIEL AND INFORMATION -- OBSERVE
5. WHAT TO CHANGE IN STATE AND/OR MODEL TO ACHIEVE GOALS - ORIENT
6. PRIORITIZE CHANGES – STRATEGY – DECIDE WHICH CHANGES TO IMPLEMENT
7. TACTICS – BUSINESS DYNAMICS -- ACT
MODEL
ACTUAL
SIMULATE iThink - Monte Carlo
8. RESULTS – OBSERVE AGAIN
9. RETURN TO 1. AND REPEAT AS NECESSARY
CJMaday
2012

4. SUMMARY PREVIEW Intuition, Feedback and Feedforward OBSERVE
Current Reality
STRATEGY
DECIDE
What to Change
TACTICS
ACT
Implement Changes
SYSTEM
(BUSINESS)
DYNAMICS
MODEL
ACTUAL
RESULTS
MODEL
ACTUAL
COMPARE
Goal(s) What to Change to
ORIENT
CJMaday
2012

5. SUMMARY Set Goals ( Legally, Ethically and Morally)
Victory
Money
Mislead or Confuse Opponent
Your Goal?
Compare Goals With Current Reality – OBSERVE; then Work to Realize the Goals – ORIENT Yourself
HOW?
Set your Strategy – What to Do? Make Changes that Produce the Most Return.
CJMaday 2012

6. SUMMARY (cont)
Available Tactics - Factory Physics which Include or is Augmented with
Constraints Management (TOC)
Drum-Buffer-Rope
Lean
6 Sigma
Slack
Finite Capacity Scheduling (FCS)
CONWIP
JIT
Kanban
CJMaday
2012

7. SUMMARY (cont) Available Tactics (cont) QFD MRP I and II ERP
Cynefin Framework
Efficiency
Cash Flow
Materiel Flow
Information Flow
…….
CJMaday
2012

8. SUMMARY (cont) DECIDE which tactics to use and how much of each
Determine Investment Required
Estimate Outcome, Payoff
ACT
OBSERVE
Model Predicted Results
Actual Results
Make Cash, Materiel and Information Flow Analyses
Repeat Process
CJMaday
2012

9. INTUITIVE COMPETENCE and SOFTWARE COMPETENCE
Rizzo points out
that humans handle small systems; such as cars, bicycles, some aspects of flight and video games. This uses intuitive competence.
that humans cannot handle large systems; such as open loop unstable aircraft, power plants, large airports, etc. This requires modeling competence (aka decision-by-wire or software competence)
CJMaday 2012

10. BACKGROUND
Forrester’s Industrial Dynamics , Sterman’s Business Dynamics
Deming’s PDCA (including DMAIC) ’s …
Profound Knowledge
Hopp and Spearman, Factory Physics, 3rd Edition, 2008
Boyd’s O-O-D-A Maneuver – Implicit Cascaded Feedback Dynamics, Intuitive Application of the Principle of Optimality
Rizzo’s Model-Predictive Control
Goldratt’s TOC & TP …..
Casparis’ Management Dynamics
Debra Smith’s The Measurement Nightmare
CJMaday
2012

11. OVERVIEW
Merge/Integrate Business Dynamics, Factory Physics, and O-O-D-A to form an innovative and winning strategy in competition. O-O-D-A contains much, if not all, of Sun Tzu’s Art of War and Deming’s Profound Knowledge.
The term “dynamics” is used in the systems or engineering sense, continuous, discrete, deterministic, stochastic.
Merge these concepts using a feedback control system framework to 1) confuse, outsmart, and overcome your opponent or 2) achieve your goal.
CJMaday 2012

12. APPROACHES AND TOOLS
Decisions within decisions. Cascaded feedback system. Variation and Disturbances may be manageable.
Qualitative and Quantitative approach to problem solving.
Value Streams (Cash, Materiel, and Information)
Profound knowledge.
Intuitive (implicit) competence – small systems.
Software (explicit) competence – large systems.
CJMaday 2012

13. PDCA
Deming’s Plan-Do-Check-Act. Can be enhanced by adding a 5th step, Evaluate, followed by a feedback loop to return to Plan. Chet Richards might refer to this as the PDCA “loop” with power.
CJMaday 2012

14. O-O-D-A Observe-Orient-Decide-Act
It is a loop that contains internal or cascaded feedback.
Richards calls it a “loop” with power.
CJMaday 2012

15. O-O-D-A
SET THE GOAL
OBSERVE Get and absorb all the information you can by whatever means possible. This usually takes time, years even. Can we do it faster? We better!
ORIENT
This is the essence of the process and is supported by the Observe, Decide and Act contributions.. It is formed at least by genetic heritage, surrounding culture, experience and previous learning.
The mind combines all or part of this background to form the “many-sided cross-references”, implicit and explicit, which then become a new orientation.
CJMaday 2012

16. O – O – D – A ORIENT (continued)
Seek out and find data that don’t fit your conventional wisdom or biases….QUICKLY!!
Analysis and Synthesis
Axiomatic Design
System
Project
Process
Product
Optimization
Design of Experiments
Design of Components
Dynamic Programming
Linear Programming
TRIZ
CJMaday
2012

17. O-O-D-A ORIENT(continued) System Dynamics/ TOC
Modeling
Feedback Control
Simulation
Cash Flow, Materiel Flow, Information Flow
Cynefin Framework ( Subset of OODA)
Simple
Complicated
Complex
Chaotic
Disordered
Inductive logic
Deductive logic
Abductive logic
CJMaday 2012

18. O-O-D-A ORIENT (continued) Profound Knowledge Heuristics Intuition
Insight
Similar to abductive reasoning, hunches, that is
CJMaday 2012

19. O-O-D-A
DECIDE
Intuitive competence or implicit decision making (aka agility) based on Observation, Orientation and Profound Knowledge.
Explicit decision making based on System Dynamics modeling and simulation, Optimality Principle or Dynamic Programming, Design of Experiments, TOC, Lean, Six Sigma, TRIZ, Monte Carlo Methods et al. This can lead to software competence. Current computational speeds provide some agility.
Set Strategy
CJMaday 2012

20. ACT O-O-D-A Deception Ambiguity Generate surprise and panic
Seize the initiative and keep it
Practice, Test, and Evaluate
Equivalent to Complex and Chaotic Domains in Cynefin Framework
Implement Tactics
CJMaday 2012

21. SYSTEM DYNAMICS System Dynamics Software Competence
Model the system to be controlled
Controller dynamics – feedback
Simulation
Software Competence
How does change occur?
CJMaday 2012

22. OVERALL GOAL
CREATE DISORDER AND CONFUSION - OUTSMART THE COMPETITION - WINNING STRATEGY
Faster decision cycle-----air-to-air-combat, intuitive competence
Different decision cycle-----outside the box
Decision-by-wire competence (System Dynamics)
CJMaday 2012

23. Feedback Diagram
This diagram is not meant to be unique. It is a guide to be used in your situation. Essential features include feedback and Implicit Guidance and Control. It is qualitative and quantitative.
CJMaday
2012

24. OVERVIEW REVIEW Intuition, Feedback and Feedforward OBSERVE
Current Reality
STRATEGY
DECIDE
What to Change
TACTICS
ACT
Implement Changes
SYSTEM
(BUSINESS) DYNAMICS
MODEL
ACTUAL
RESULTS
MODEL
ACTUAL
Compare goal(s) to current reality
Goal(s) What to Change to
ORIENT
CJMaday
2012

25. OVERVIEW
TOC, Drum-Buffer-Rope and Critical Chain Project Management use buffer management such that the buffers provide the feedback signals that allow the control processes to successfully deal with variation.
Is buffer feedback the reason for their effectiveness? IMO YES!
CONWIP is a process that combines feedback and feedforward implicitly. Total WIP is controlled explicitly. An innovative and insightful approach; clever, that is!

26. MORE OVERVIEW Apply System Dynamics and OODA
Identify the problem, make sense of it
Use Cynefin Framework to categorize problem
Simple or Complicated = Small; Implicit or Intuitive Decision Making
Complex or Chaotic = Large; Explicit Decision Making -- aka Decision-by-Wire
CJMaday 2012

27. Some Necessary Requirements
Profound Knowledge
Understand goal and context – choose form of decision analysis
System Dynamics Model
Implicit and intuitive
Explicit computer model
Feedback algorithm
CJMaday
2012

28. WHAT NEXT?
How to sell Software Decision Making?
How to model the system?
HOW TO BRIDGE THE GAP BETWEEN SOFTWARE AND INTUITION ? (Many thanks to Jim Bowles for this input!)
CJMaday
2012

29. References Science, Strategy and War, F. P. B. Osinga, Routledge 2007.
Industrial Dynamics,J. W. Forrester, The MIT Press, 1961.
Business Dynamics, John Sterman, McGraw Hill 2000.
The Art of War, Sun Tzu, Filiquarian Publishing
Model-Predictive Control, A. Rizzo, PDI institute, 2010.
Kelvyn Youngman,
CJMaday 2012

30. References (cont)
“A Leader’s Framework for Decision Making”, David J. Snowden and Mary E. Boone, Harvard Business Review, November 2007.
Certain to Win, Chet Richards, Xlibris 2004
Fasttransients.wordpress.com, Chet Richards
The Mind of War, Grant T. Hammond, Smithsonian Books, 2001
CJMaday 2012

31. ACKNOWLEDGEMENTS Jim Bowles Clarke Ching Steve Holt Larry Leach
Rob Newbold
Tony Rizzo
Robert Roy
Scott Weller
Kelvyn Youngman
CJMaday
2012