The Management of Process & People (Complexity) - System Dynamics

Policy resistance
Our decisions provoke unforeseen reactions (feedback).
The result is the tendency for interventions to be defeated
by the response of the system itself.
Question: Why dont we learn, from experience, to avoid this?

The Management of Process & People (Complexity) - System Dynamics

Attribution errors and false learning

Cause and effect are often distant in time and space, and delayed. Also, distant
consequences of our actions are different from, and less salient than, their
approximate effects (or are simply unknown).
Further, people tend to assume each event has a single cause and often cease
their search for explanations when the first sufficient cause is found.
Accordingly, managers consistently make attribution errors and therefore create
false learning.
This explains why attribution errors and false learning are chronic problems in
organizations.

Question: Why cant we just ignore feedback and use intuition to avoid
this?

The Management of Process & People (Complexity) - System Dynamics

The counterintuitive behavior of complex systems

Most cases of policy resistance are caused by cognitive limitations
in dealing with dynamic complexity.
Dynamic complexity the interaction of agents over time.
In making a decision, the human mind can handle up to
approximately 8 explicit variables.
The human mind cant intuitively calculate the outcome of large
combinations of interacting agents because the calculation
complexity exceeds our mental limits; cognitive limitation.
Question: Then how can we calculate the impact of our decisions?

The Management of Process & People (Complexity) - System Dynamics

We can model our process and analyze the potential impact of

our decisions.

A Causal Loop Diagram

What is the impact of our decision on the organization?

The Management of Process & People (Complexity) - System Dynamics

In the Causal Loop Diagram above, identify a:

a. Stock
b. Flow
c. Negative feedback loop
d. Positive feedback loop
e. Negative relationship
f. Positive relationship

sales force productivity

The Management of Process & People (Complexity) - System Dynamics

The fundamental principle of system dynamics:

The structure of the system gives rise to its behavior

The most fundamental components of Structure:

Stocks
Flows
Positive feedback loops
Negative feedback loops
Time delays