systems thinking

We intuitively get how complex systems work because we live our lives in them. But explaining how they work, either through speech or writing, is difficult.

Filling a glass of water is easy. But if I had to describe the process of filling a glass to the desired level without spilling and the role that feedback loops played in the process, then the explanation would stretch across several paragraphs, and you’d be bored to death by the end of it.

But we can learn how complex systems behave without breaking everything into its individual components, just like we can learn to drive a car without needing a detailed understanding of everything that’s happening under the bonnet.

But when it comes to systems thinking, the way we communicate is in itself a constraint. According to Steven Pinker, when we need to explain a difficult concept, our “… challenge is to use the fundamentally one-dimensional medium of speech (one word after another) to convey a multi-dimensional (hierarchical and crosslinking) structure.”

Simulations (if they are well written) are instrumental in helping us better understand organisational systems. In a business simulation, making a single decision will have an impact on several metrics - financial and non-financial. It forces us to think through our decision's short and long-term trade-offs. We need to consider how other players in the market might behave and how their choices might impact our outcomes.

Sure, we can describe the impact of all these things, one word after another, but having a simulation tool that acts as a “what if” calculator and lets us experiment with several scenarios allows us to better understand the system in minutes, rather than days.

Business simulations are a simplification of reality designed to promote understanding. It’s a method that allows for multi-dimensional storytelling. And it’s a story in which participants get to play a leading role. And by immersing themselves in the story, they develop a better understanding of the simulated system. Through practice, they improve the quality of their decisions. They get to learn from mistakes in a risk-free space.