"Having a causal picture of the business makes it possible to explain the forces driving performance, and answer "how did we get here?". This is a prerequisite for deciding what policies and actions will push future performance in the desired direction."
donna mayo, pa strategy expert
System Dynamics is a methodology and mathematical modeling technique for framing, understanding, and discussing complex issues and problems. System Dynamics was invented at the Massachusetts Institute of Technology in the 1950s to help understand complex problems and design durable improvements. Professor Jay Forrester created the field by applying what he learned about systems in his work in electrical engineering and control theory to other kinds of systems involving organisations and people. A key difference of System Dynamics from other ways of analysing complex systems is the use of feedback loops. System Dynamics focuses on how factors in a system are connected by feedback loops that create the non-linearity and unintended consequences often found in complex situations.
PA’s System Dynamics team started as a spin-off company from the Massachusetts Institute of Technology. We have decades of professional modelling experience focused on conducting rigorous analysis and delivering practical insights on complex, real world strategic issues. Our clients include the US Government, major contractors, and Global Top 1000 Corporations. Over the past four decades, we have carried out hundreds of assignments aiding senior clients with difficult challenges of business strategy, market strategy, project and program management, government policies, and other issues.
Our approach to using system dynamics analysis is well suited to analyzing complex long-term business issues because it:
-Represents the complex set of cause-effect relationships that determine performance. This web of relationships describes how a business system works, and is captured in our models to help analyze full impacts over time.
-Includes a comprehensive representation of the participants relevant to a business situation. This includes key stakeholders, their actions and relevant outcomes (revenue, cost, schedule) and constraints (capacity, work sequence issues).
-Uses all available information to help develop and test/refine a model. This includes ‘hard’ measurable factors (hours expended, market share, costs) and ‘softer’ more qualitative factors (worker experience, schedule pressure) that are important. We use information in different forms, eg historical time-series data, point estimates, studies and expert interviews.
-Enables exploring many scenarios to analyze robustness of results under different conditions and provides a clear, quantitative basis to assess options or issues and see impacts over time.
To find out more about how system dynamics might be applied to your organisation's strategic challenges, please contact us now.