WEBVTT 00:00:10.760 --> 00:00:12.780 PROFESSOR: This is a full semester class 00:00:12.780 --> 00:00:15.330 divided into two half semester pieces. 00:00:15.330 --> 00:00:18.840 15.871 is the six unit H-1 class. 00:00:18.840 --> 00:00:21.790 That's what probably most of you are thinking about doing. 00:00:21.790 --> 00:00:24.870 What I would urge you to do is to take both halves, 00:00:24.870 --> 00:00:27.650 because you and I will co-teach the fall semester. 00:00:27.650 --> 00:00:30.270 The second half is called 15.872. 00:00:30.270 --> 00:00:33.170 And although we think this first half is good, 00:00:33.170 --> 00:00:35.490 the real value in terms of developing 00:00:35.490 --> 00:00:38.720 a meaningful capability for you to be 00:00:38.720 --> 00:00:41.920 able to use system dynamics and systems thinking effectively 00:00:41.920 --> 00:00:44.440 will come if you take the full semester. 00:00:44.440 --> 00:00:47.470 You don't have to exercise that real option today. 00:00:47.470 --> 00:00:49.890 You can wait make that decision a little later. 00:00:49.890 --> 00:00:54.920 But think about it for right now for your semester planning. 00:00:54.920 --> 00:00:58.400 There are five assignments over the course of this semester. 00:00:58.400 --> 00:01:01.430 So the good news is there are no exams. 00:01:01.430 --> 00:01:04.780 The bad news is that there are five assignments 00:01:04.780 --> 00:01:07.630 and this class has a reputation that I believe 00:01:07.630 --> 00:01:12.450 is reasonably well deserved for having a heavy workload. 00:01:12.450 --> 00:01:14.580 The reason for that is clear. 00:01:14.580 --> 00:01:17.330 I can't teach you anything. 00:01:17.330 --> 00:01:18.820 I know you're giggling over there. 00:01:18.820 --> 00:01:20.690 But it's absolutely true. 00:01:20.690 --> 00:01:22.880 I can't teach you anything. 00:01:22.880 --> 00:01:25.020 All that I can do-- all that we can do 00:01:25.020 --> 00:01:28.070 is create an opportunity for you to learn for yourself. 00:01:28.070 --> 00:01:30.810 You have to do it, try it, practice it, 00:01:30.810 --> 00:01:32.840 if you're going to develop the capability. 00:01:32.840 --> 00:01:35.860 That is not going to happen by coming to class. 00:01:35.860 --> 00:01:40.515 Now, you need to come to class, and participation 00:01:40.515 --> 00:01:41.390 is part of the grade. 00:01:41.390 --> 00:01:43.690 But that's not sufficient. 00:01:43.690 --> 00:01:48.610 It's also necessary for you to try everything out. 00:01:48.610 --> 00:01:51.010 And that is why we have those assignments. 00:01:51.010 --> 00:01:53.460 You also are going to need to read the textbooks. 00:01:53.460 --> 00:01:54.840 So this is the book. 00:01:54.840 --> 00:01:56.840 And it's pretty fat and heavy. 00:01:56.840 --> 00:01:59.740 You're not going to be asked to read the whole thing. 00:01:59.740 --> 00:02:01.600 The bad news on that is I wrote it. 00:02:01.600 --> 00:02:08.009 So I can tell you that it'll definitely cure your insomnia. 00:02:08.009 --> 00:02:09.820 I don't care if you buy it. 00:02:09.820 --> 00:02:11.750 Although I always say, if you buy two, 00:02:11.750 --> 00:02:13.550 then you can kind of go like this all day, 00:02:13.550 --> 00:02:15.990 and you can save money by quitting your gym membership. 00:02:15.990 --> 00:02:18.820 But I don't care if you buy it. 00:02:18.820 --> 00:02:20.520 I do care that you read it. 00:02:20.520 --> 00:02:22.560 You can't do well on the assignments 00:02:22.560 --> 00:02:25.520 unless you read the material in the book carefully, 00:02:25.520 --> 00:02:27.690 and work through some of those examples. 00:02:27.690 --> 00:02:29.820 Chapter one is what you need to be reading first. 00:02:29.820 --> 00:02:32.280 The syllabus tells you what to read for every day. 00:02:32.280 --> 00:02:34.015 In addition, from time to time, we 00:02:34.015 --> 00:02:35.890 are asking you to read a couple of short case 00:02:35.890 --> 00:02:37.540 studies or other material. 00:02:37.540 --> 00:02:39.890 And we'll provide follow up articles 00:02:39.890 --> 00:02:43.440 from the professional literature from time to time as well. 00:02:43.440 --> 00:02:45.125 So the question is why? 00:02:45.125 --> 00:02:47.780 Why do we need something like system dynamics and systems 00:02:47.780 --> 00:02:48.310 thinking? 00:02:48.310 --> 00:02:51.090 And I think the answer is not simply 00:02:51.090 --> 00:02:53.540 that the world is changing faster and faster. 00:02:53.540 --> 00:02:54.710 Things are accelerating. 00:02:54.710 --> 00:02:55.590 Everybody knows that. 00:02:55.590 --> 00:02:58.010 That's kind of the price of admission to the world today. 00:02:58.010 --> 00:03:02.240 It's that, despite all the tools and methods that we've got, 00:03:02.240 --> 00:03:05.200 all the analytic power and our cleverness, 00:03:05.200 --> 00:03:06.790 things are getting harder and harder. 00:03:06.790 --> 00:03:09.650 And more and more of the policies that we implement 00:03:09.650 --> 00:03:12.610 are failing to solve the pressing challenges 00:03:12.610 --> 00:03:13.820 that we face. 00:03:13.820 --> 00:03:15.490 And this is not what I'm saying this 00:03:15.490 --> 00:03:18.860 is what the senior leaders and organizations with whom I work, 00:03:18.860 --> 00:03:20.140 what they tell me. 00:03:20.140 --> 00:03:23.060 And the thoughtful ones-- the most thoughtful ones-- 00:03:23.060 --> 00:03:25.180 they say it's not just the things 00:03:25.180 --> 00:03:28.200 are getting harder and more difficult, 00:03:28.200 --> 00:03:31.270 despite our cleverness and our analytic power, 00:03:31.270 --> 00:03:33.020 but because of it. 00:03:33.020 --> 00:03:35.740 That we're too clever for our own good. 00:03:35.740 --> 00:03:39.370 And I illustrate this traditionally with this picture 00:03:39.370 --> 00:03:41.640 of one of the leaders of an organization 00:03:41.640 --> 00:03:42.804 that I've worked with. 00:03:42.804 --> 00:03:44.470 And here is the poor guy in this office. 00:03:44.470 --> 00:03:46.280 Now many of you have seen this before, 00:03:46.280 --> 00:03:49.370 but I think it's just a great representation of what's 00:03:49.370 --> 00:03:50.300 going on. 00:03:50.300 --> 00:03:53.950 Like most senior managers or lower level managers, 00:03:53.950 --> 00:03:57.710 he is completely squeeze by pressures on all sides. 00:03:57.710 --> 00:03:58.590 Can't breathe. 00:03:58.590 --> 00:04:00.350 Claustrophobic. 00:04:00.350 --> 00:04:05.050 And what you're asked to do as a manager is to be decisive. 00:04:05.050 --> 00:04:06.590 You've got to make decisions. 00:04:06.590 --> 00:04:07.700 Boo. 00:04:07.700 --> 00:04:10.200 Things are now much better for you. 00:04:10.200 --> 00:04:12.130 Now you can begin to breathe more easily, 00:04:12.130 --> 00:04:13.450 see out to the side. 00:04:13.450 --> 00:04:14.330 Relief. 00:04:14.330 --> 00:04:15.600 Things are great. 00:04:15.600 --> 00:04:18.130 But as you may suspect, there could 00:04:18.130 --> 00:04:20.354 be some unanticipated side effects. 00:04:23.300 --> 00:04:25.340 Now, the reason I like this and the reason 00:04:25.340 --> 00:04:27.200 I'm showing it to you again, so I 00:04:27.200 --> 00:04:30.790 think it's a great way to capture the core of what 00:04:30.790 --> 00:04:33.570 a lot of systems thinking is about. 00:04:33.570 --> 00:04:35.230 Why does this happen? 00:04:35.230 --> 00:04:36.420 Why does this happen? 00:04:36.420 --> 00:04:39.767 And why don't people learn? 00:04:39.767 --> 00:04:41.350 So it's not just that it happens once, 00:04:41.350 --> 00:04:44.150 but people do it over and over again. 00:04:44.150 --> 00:04:44.650 So why? 00:04:44.650 --> 00:04:45.941 That's a real question for you. 00:04:45.941 --> 00:04:48.410 So what do think? 00:04:48.410 --> 00:04:49.740 Why might this happen? 00:04:49.740 --> 00:04:52.190 And why might this phenomenon persist? 00:04:52.190 --> 00:04:52.836 Yeah go ahead. 00:04:52.836 --> 00:04:54.419 AUDIENCE: It's only in the short term, 00:04:54.419 --> 00:04:56.402 and the short-term implications of that action. 00:04:56.402 --> 00:04:57.110 PROFESSOR: Great. 00:04:57.110 --> 00:05:01.020 So short-term time rise and not thinking 00:05:01.020 --> 00:05:02.370 about what might happen later. 00:05:02.370 --> 00:05:04.530 So apres-moi le deluge. 00:05:04.530 --> 00:05:05.410 I don't care. 00:05:05.410 --> 00:05:07.270 I'll do what's good for me in the short run. 00:05:07.270 --> 00:05:09.760 I don't care if it destroys the world later. 00:05:09.760 --> 00:05:10.590 OK great. 00:05:10.590 --> 00:05:11.090 What else? 00:05:11.090 --> 00:05:12.660 Yeah go ahead. 00:05:12.660 --> 00:05:14.040 AUDIENCE: Feedback loops. 00:05:14.040 --> 00:05:18.151 So you would get some feedback and you won't really 00:05:18.151 --> 00:05:20.390 consider it the way that it really is. 00:05:20.390 --> 00:05:24.290 PROFESSOR: So there's definitely a feedback loop here, right? 00:05:24.290 --> 00:05:28.699 And the problem is that it takes too much time 00:05:28.699 --> 00:05:29.490 for that to happen. 00:05:29.490 --> 00:05:31.940 So the time delay in getting the feedback-- maybe 00:05:31.940 --> 00:05:35.120 missing feedback-- is connected to the short time horizon. 00:05:35.120 --> 00:05:37.650 In fact, what's going to happen in most organizations 00:05:37.650 --> 00:05:41.480 to this manager right about now? 00:05:41.480 --> 00:05:43.330 He solved the problem, right? 00:05:43.330 --> 00:05:44.290 So what happens to him. 00:05:44.290 --> 00:05:45.120 AUDIENCE: He gets promoted. 00:05:45.120 --> 00:05:45.995 PROFESSOR: Of course. 00:05:45.995 --> 00:05:46.940 He gets promoted. 00:05:46.940 --> 00:05:50.810 You get to sit in the chair. 00:05:50.810 --> 00:05:52.580 It's a combination of short time horizon, 00:05:52.580 --> 00:05:55.600 and not only by that guy, but the people 00:05:55.600 --> 00:05:57.070 who are evaluating his performance 00:05:57.070 --> 00:05:59.850 and maybe encouraging him to have a short time horizon. 00:05:59.850 --> 00:06:04.730 That's not going to be good for anybody in this situation. 00:06:04.730 --> 00:06:06.250 What else? 00:06:06.250 --> 00:06:08.090 What else might be going on? 00:06:08.090 --> 00:06:11.350 We get somebody over on this side? 00:06:11.350 --> 00:06:13.433 [? Argoff, ?] what do you think? 00:06:13.433 --> 00:06:17.664 AUDIENCE: I think it's also, like you said it was, 00:06:17.664 --> 00:06:19.205 when you're thinking only short term, 00:06:19.205 --> 00:06:21.610 you find that can you make a decision without thinking 00:06:21.610 --> 00:06:23.297 about what the impact of-- 00:06:23.297 --> 00:06:25.130 PROFESSOR: This is a really important point. 00:06:25.130 --> 00:06:28.030 And let me put it into our terms. 00:06:28.030 --> 00:06:35.880 When people say, it wasn't my fault, the reason we failed 00:06:35.880 --> 00:06:40.540 was some outside effect, some unanticipated side effect, 00:06:40.540 --> 00:06:42.090 something that came from out there. 00:06:42.090 --> 00:06:43.120 It wasn't my fault. 00:06:43.120 --> 00:06:45.370 They're trying to persuade you that they, in fact, are 00:06:45.370 --> 00:06:47.720 great managers and shouldn't be held responsible 00:06:47.720 --> 00:06:48.870 for the bad outcome. 00:06:48.870 --> 00:06:52.640 In fact, almost all the time, it is at least partially 00:06:52.640 --> 00:06:55.160 the result of their own past decisions. 00:06:55.160 --> 00:06:58.450 Feedback they didn't understand and didn't recognize. 00:06:58.450 --> 00:07:02.280 And what they're actually trying to do 00:07:02.280 --> 00:07:04.170 is persuade you that it wasn't their fault. 00:07:04.170 --> 00:07:06.530 But what they're really communicating 00:07:06.530 --> 00:07:09.720 is how narrow and blinkered and inadequate 00:07:09.720 --> 00:07:12.040 is their understanding of the system in which they're 00:07:12.040 --> 00:07:14.840 embedded, what we would call their mental model. 00:07:14.840 --> 00:07:16.350 I think that's where you were going. 00:07:16.350 --> 00:07:19.030 So that's a really important idea 00:07:19.030 --> 00:07:21.060 in what we're going to be about. 00:07:21.060 --> 00:07:24.260 So one of the mental models that I think 00:07:24.260 --> 00:07:27.890 is the most damaging out there is this open loop mental model. 00:07:27.890 --> 00:07:30.460 And here's the question. 00:07:30.460 --> 00:07:32.250 In a project that you've been involved in 00:07:32.250 --> 00:07:34.050 or that you were reviewing, how many times 00:07:34.050 --> 00:07:35.350 have you seen this picture? 00:07:35.350 --> 00:07:36.380 Can I see hands? 00:07:36.380 --> 00:07:38.840 Who's seen it? 00:07:38.840 --> 00:07:39.930 Almost everybody. 00:07:39.930 --> 00:07:44.040 Who's drawn it in one of their project proposals? 00:07:44.040 --> 00:07:46.640 About 3/4 of the same hands. 00:07:46.640 --> 00:07:50.930 This is a very interesting, unintended revelation 00:07:50.930 --> 00:07:52.610 of mental models that people hold 00:07:52.610 --> 00:07:54.660 about complex dynamical systems. 00:07:54.660 --> 00:07:57.720 And it basically says, there's a beginning and middle and end 00:07:57.720 --> 00:07:58.444 to the project. 00:07:58.444 --> 00:07:59.860 We're going to identify the issue. 00:07:59.860 --> 00:08:02.068 We're going to gather the data, evaluate our choices, 00:08:02.068 --> 00:08:04.240 select the optimal solution, and then implement. 00:08:04.240 --> 00:08:06.950 And of course, the students in the last class when I said, 00:08:06.950 --> 00:08:08.332 what's wrong with this picture? 00:08:08.332 --> 00:08:09.290 They all said, oh well. 00:08:09.290 --> 00:08:09.510 You know. 00:08:09.510 --> 00:08:10.310 You're a professor. 00:08:10.310 --> 00:08:13.680 So you've never implemented anything in your life. 00:08:13.680 --> 00:08:14.560 OK. 00:08:14.560 --> 00:08:16.120 Now, in fact, a lot of my research 00:08:16.120 --> 00:08:17.820 is devoted to the question of why 00:08:17.820 --> 00:08:19.820 implementation so often fails. 00:08:19.820 --> 00:08:21.220 We're going to talk about that. 00:08:21.220 --> 00:08:23.560 System dynamics isn't useful unless you can actually 00:08:23.560 --> 00:08:25.740 make things different. 00:08:25.740 --> 00:08:28.230 If you can't catalyze change in your organizations 00:08:28.230 --> 00:08:30.670 in which you're engaged, none of this is meaningful. 00:08:30.670 --> 00:08:32.900 You might as well become a professor. 00:08:32.900 --> 00:08:34.990 So we're going to talk a lot about-- 00:08:34.990 --> 00:08:36.740 and I mean that in all the negative senses 00:08:36.740 --> 00:08:38.530 that you're laughing about. 00:08:38.530 --> 00:08:40.929 We're going to talk about system dynamics in action, 00:08:40.929 --> 00:08:42.720 especially in the second half of the class. 00:08:42.720 --> 00:08:44.675 You're going to see a lot of case studies of how people have 00:08:44.675 --> 00:08:46.820 been able to use these tools effectively 00:08:46.820 --> 00:08:50.330 in difficult political organizational settings. 00:08:50.330 --> 00:08:51.620 So that's an issue. 00:08:51.620 --> 00:08:52.950 But it's not the real problem. 00:08:52.950 --> 00:08:56.280 The real problem with this is that it has this open loop 00:08:56.280 --> 00:08:59.060 one-way sequential perspective that 00:08:59.060 --> 00:09:01.430 says there's a beginning, middle and end to the project. 00:09:01.430 --> 00:09:05.130 I don't know about you, but no project I ever been involved in 00:09:05.130 --> 00:09:06.840 has ever gone that way. 00:09:06.840 --> 00:09:10.100 There's always iteration, feedback. 00:09:10.100 --> 00:09:12.690 We have to go back to the beginning, almost always 00:09:12.690 --> 00:09:16.247 unintended, unplanned iteration, because we go through 00:09:16.247 --> 00:09:17.830 and we find out as we gather the data, 00:09:17.830 --> 00:09:19.856 we interview the folks that are engaged. 00:09:19.856 --> 00:09:21.230 And we evaluate our technologies, 00:09:21.230 --> 00:09:23.410 supply chain for the new product or whatever it is. 00:09:23.410 --> 00:09:25.160 We really didn't understand the situation. 00:09:25.160 --> 00:09:27.368 We really didn't understand what the real problem is. 00:09:27.368 --> 00:09:28.970 We have to loop back to the beginning. 00:09:28.970 --> 00:09:32.280 This happens continually all the way through the project. 00:09:32.280 --> 00:09:34.880 And it's that feedback that's critical here. 00:09:34.880 --> 00:09:39.810 So this is the metaphor that I want you to fix in your mind. 00:09:39.810 --> 00:09:41.360 You make decisions. 00:09:41.360 --> 00:09:43.850 Your decisions change the world. 00:09:43.850 --> 00:09:46.170 And then that creates new information 00:09:46.170 --> 00:09:50.740 which changes your next decision in a continual, emergent, 00:09:50.740 --> 00:09:54.581 iterative set of feedback processes. 00:09:54.581 --> 00:09:56.330 Now let me make this a little more formal. 00:09:56.330 --> 00:09:58.690 Again, this is a slight review for those of you 00:09:58.690 --> 00:10:00.190 who have had me in orientation. 00:10:00.190 --> 00:10:01.690 But it's worth it, especially if you 00:10:01.690 --> 00:10:03.440 haven't seen this for awhile. 00:10:03.440 --> 00:10:05.920 So here's that open loop perspective. 00:10:05.920 --> 00:10:07.410 People say, I know my goals. 00:10:07.410 --> 00:10:08.710 I want better market share. 00:10:08.710 --> 00:10:09.990 I want more profitability. 00:10:09.990 --> 00:10:13.400 I want a bigger house, or a nicer car, whatever it is. 00:10:13.400 --> 00:10:15.422 That's going to motivate my decisions. 00:10:15.422 --> 00:10:17.130 And then my decisions are going to change 00:10:17.130 --> 00:10:20.710 the state of the world, state of the system, problem solved. 00:10:20.710 --> 00:10:21.940 That's wrong. 00:10:21.940 --> 00:10:24.840 I can't know what decisions to make 00:10:24.840 --> 00:10:27.430 just because I know where I want to be. 00:10:27.430 --> 00:10:30.470 I have to also know where I am right now. 00:10:30.470 --> 00:10:31.920 There has to be a feedback. 00:10:31.920 --> 00:10:35.810 So the example I always give is that, I'm a bicycle commuter, 00:10:35.810 --> 00:10:38.140 and as I was riding into MIT from Lexington 00:10:38.140 --> 00:10:41.200 this morning, as every day, I must 00:10:41.200 --> 00:10:43.420 keep my bike on the right hand side of the path. 00:10:43.420 --> 00:10:45.680 If I don't, I'm going to have a crash. 00:10:45.680 --> 00:10:48.220 So just knowing that I need to be on the right hand side 00:10:48.220 --> 00:10:51.030 is not enough for me to know how to turn the handlebars. 00:10:51.030 --> 00:10:54.790 I have to have the feedback from where my bicycle actually 00:10:54.790 --> 00:10:57.540 is in order to know which way to turn the handlebars. 00:10:57.540 --> 00:11:01.990 It is the same for you, driving your car or flying an aircraft. 00:11:01.990 --> 00:11:06.690 Now if flying your organization through hostile skies, dog 00:11:06.690 --> 00:11:08.980 fighting with the competition, keeping investors 00:11:08.980 --> 00:11:11.080 happy and calm in the back, and serving them 00:11:11.080 --> 00:11:15.700 nice drinks and hors d'oeuvres-- if flying your company 00:11:15.700 --> 00:11:17.620 was just as easy as flying an aircraft, which 00:11:17.620 --> 00:11:18.744 isn't that easy by the was. 00:11:18.744 --> 00:11:22.850 It doesn't take much bad weather, fatigue, or substances 00:11:22.850 --> 00:11:25.310 in your bloodstream to degrade your abilities so 00:11:25.310 --> 00:11:27.795 much that you're going to crash the plane, crash your car, 00:11:27.795 --> 00:11:30.680 or crash your bicycle. 00:11:30.680 --> 00:11:33.800 But if it was as easy to run your company as it 00:11:33.800 --> 00:11:35.930 is to ride a bike, no problem. 00:11:35.930 --> 00:11:37.520 We wouldn't need this class. 00:11:37.520 --> 00:11:38.250 But it's not. 00:11:38.250 --> 00:11:41.710 And it's not easy in part, because that feedback loop, 00:11:41.710 --> 00:11:46.580 which represents the intended effects of your decisions, 00:11:46.580 --> 00:11:49.490 but doesn't capture the unintended effects. 00:11:49.490 --> 00:11:51.090 It's only piece of the system. 00:11:51.090 --> 00:11:54.710 So you're embedded in a much more intricate complex system 00:11:54.710 --> 00:11:56.870 in which that's what's going on for you. 00:11:56.870 --> 00:12:00.300 That represents mental models of what you ought to do. 00:12:00.300 --> 00:12:02.200 But mental models are limited. 00:12:02.200 --> 00:12:05.650 And all the impacts of your decisions-- all the effects 00:12:05.650 --> 00:12:08.040 of your decisions that you didn't think about in advance, 00:12:08.040 --> 00:12:09.790 and that aren't part of your mental model, 00:12:09.790 --> 00:12:12.670 they're going to manifest as so-called side effects. 00:12:12.670 --> 00:12:15.750 Remember there's no such thing as a side effect. 00:12:15.750 --> 00:12:18.400 There's just the effects that are in your mental model 00:12:18.400 --> 00:12:21.020 that you were counting on and everything else 00:12:21.020 --> 00:12:24.879 is going to manifest as a so-called side effect. 00:12:24.879 --> 00:12:26.420 And they're usually going to feedback 00:12:26.420 --> 00:12:29.860 in a way that's opposite to your goals. 00:12:29.860 --> 00:12:31.710 Much more interesting, you're not 00:12:31.710 --> 00:12:32.950 the only player in the world. 00:12:32.950 --> 00:12:34.980 So there's all the other actors out there, 00:12:34.980 --> 00:12:36.637 all the other agents out there. 00:12:36.637 --> 00:12:38.720 And they have their own goals, which are typically 00:12:38.720 --> 00:12:40.016 different from your goals. 00:12:40.016 --> 00:12:41.640 You want more market share, so do they. 00:12:41.640 --> 00:12:44.750 There is only 100% to divide up. 00:12:44.750 --> 00:12:46.460 And every time you make decisions, 00:12:46.460 --> 00:12:48.710 even if they're efficacious that pulled 00:12:48.710 --> 00:12:50.940 the world closer to your goals, they're 00:12:50.940 --> 00:12:53.190 necessarily going to be pulling the world farther 00:12:53.190 --> 00:12:55.390 away from those other folks goals-- 00:12:55.390 --> 00:12:58.720 your customers, your suppliers, your employees, the investors, 00:12:58.720 --> 00:13:01.590 the competitors, the communities in which you operate, 00:13:01.590 --> 00:13:04.900 the natural world in which all of that is embedded. 00:13:04.900 --> 00:13:06.330 That's all going to be there. 00:13:06.330 --> 00:13:11.587 And those goals are going to motivate them to take action, 00:13:11.587 --> 00:13:13.170 to try to bring the state of the world 00:13:13.170 --> 00:13:15.190 back to what they want it to be. 00:13:15.190 --> 00:13:17.490 Their mental models are limited too. 00:13:17.490 --> 00:13:20.230 And so they're going to generate unintended so-called side 00:13:20.230 --> 00:13:21.410 effects. 00:13:21.410 --> 00:13:23.870 And now this is getting to be a fairly complex thing 00:13:23.870 --> 00:13:26.080 to manage-- not as easy as riding a bicycle. 00:13:29.340 --> 00:13:33.080 The whole story here is about expanding the boundaries 00:13:33.080 --> 00:13:36.800 of your mental models so that more and more of this structure 00:13:36.800 --> 00:13:39.430 is something that you can begin to think about and try 00:13:39.430 --> 00:13:41.700 to take into account when you make decisions. 00:13:41.700 --> 00:13:43.350 You're never going to get it all, 00:13:43.350 --> 00:13:45.980 because all models are wrong. 00:13:45.980 --> 00:13:48.080 Model is not the real system. 00:13:48.080 --> 00:13:49.830 Only the reality is the reality. 00:13:49.830 --> 00:13:55.220 And everything in your head is a limited, filtered, imperfect 00:13:55.220 --> 00:13:56.390 representation. 00:13:56.390 --> 00:13:58.540 But we can do a lot better than the mental models 00:13:58.540 --> 00:14:00.180 that we have now. 00:14:00.180 --> 00:14:02.280 So what are we going to do? 00:14:02.280 --> 00:14:04.010 What we're going to do is develop tools 00:14:04.010 --> 00:14:06.510 in this class to elicit your mental models, 00:14:06.510 --> 00:14:09.310 articulate them, and do that in the context of busy people 00:14:09.310 --> 00:14:10.570 in organizations. 00:14:10.570 --> 00:14:13.210 We're going to explicitly account for feedback, 00:14:13.210 --> 00:14:16.480 and stocks and foils, and time delays, and non-linearities, 00:14:16.480 --> 00:14:19.270 and the other elements of complex dynamical systems. 00:14:19.270 --> 00:14:21.620 And then we're going to use simulation 00:14:21.620 --> 00:14:23.260 to figure out what that means. 00:14:23.260 --> 00:14:26.870 Not because the model is going to give us the answer-- 00:14:26.870 --> 00:14:30.690 all models are wrong-- because the simulation models are going 00:14:30.690 --> 00:14:34.180 to give us insight that improves our mental models 00:14:34.180 --> 00:14:35.805 and the mental models of all the people 00:14:35.805 --> 00:14:38.840 who need to be involved in order for change to happen, 00:14:38.840 --> 00:14:42.150 so that people are empowered with high leverage, 00:14:42.150 --> 00:14:46.300 effective policies to go out there and make a difference. 00:14:46.300 --> 00:14:49.020 You can read in the syllabus how we're going to do that. 00:14:49.020 --> 00:14:50.730 But I think there are three core ideas 00:14:50.730 --> 00:14:53.340 I'd like to leave you with before we break for today. 00:14:53.340 --> 00:14:56.200 The first is that it's the structure of complex systems 00:14:56.200 --> 00:14:57.910 that generates their behavior. 00:14:57.910 --> 00:15:00.130 That structure consists of the physics 00:15:00.130 --> 00:15:06.261 of the system, the information that's available to you, 00:15:06.261 --> 00:15:07.760 and then the decision rules that you 00:15:07.760 --> 00:15:11.720 used to turn that information into action. 00:15:11.720 --> 00:15:14.910 All three of those are relevant here. 00:15:14.910 --> 00:15:16.940 Mental models matter a lot. 00:15:16.940 --> 00:15:19.980 It is not enough just to come up with the right answer. 00:15:19.980 --> 00:15:22.820 And it's not enough just to change 00:15:22.820 --> 00:15:26.330 the physics of the system, or the information with a new IT 00:15:26.330 --> 00:15:28.780 system, or the incentives that people face. 00:15:28.780 --> 00:15:30.440 All those are important, but they 00:15:30.440 --> 00:15:32.170 aren't generally sufficient. 00:15:32.170 --> 00:15:35.520 And one of the very powerful mental models that's out there 00:15:35.520 --> 00:15:38.030 is what we call the fundamental attribution 00:15:38.030 --> 00:15:39.610 error in psychology. 00:15:39.610 --> 00:15:43.060 And this is an idea you should have learned at the beer game. 00:15:43.060 --> 00:15:46.260 And it's the idea that if you ask me why I've screwed up, 00:15:46.260 --> 00:15:50.390 I've got reasons known as excuses. 00:15:50.390 --> 00:15:51.830 It was the customer's fault. 00:15:51.830 --> 00:15:53.140 It was somebody else's fault. 00:15:53.140 --> 00:15:54.420 The sun was in my eyes. 00:15:54.420 --> 00:15:59.090 But if I'm asked to explain why use screwed up, 00:15:59.090 --> 00:16:01.660 It's because you're not capable. 00:16:01.660 --> 00:16:05.390 You don't have what it takes, you and everybody like you. 00:16:05.390 --> 00:16:08.060 And that is almost always wrong. 00:16:08.060 --> 00:16:09.350 And it's low leverage. 00:16:09.350 --> 00:16:10.880 It doesn't help. 00:16:10.880 --> 00:16:13.700 So to put that into practice in this class, when 00:16:13.700 --> 00:16:16.400 we come in here, and you work with us this semester, 00:16:16.400 --> 00:16:19.320 we're going to make the following basic assumption. 00:16:19.320 --> 00:16:23.390 We believe that everybody in this room is intelligent, 00:16:23.390 --> 00:16:28.970 is capable, cares about doing their best, and wants to learn.