Complex problem solving was predicted as the top required skill by 2020 by the Future of Jobs Report by WEF in 2016. Now, in 2018, the report highlights need for analytical thinking and innovation with complex problem solving remaining in the top 10. Skills demands are related to the trends in job market driven by adoption of sophisticated technologies such as AI, urge for digitalization, IoT and big data analysis.
So I was thinking to introduce here Business Dynamics, a complex problem solving method that fits any situation and is designed to tackle truly complex issues. If you like challenges, try to use the method to solve an issue described in the second half of this post.
What is Business Dynamics
Business Dynamics originates in cybernetics and is basically a system theory applied in business environment. Its founder is Jay W. Forrester and its current guru is prof. John D. Sterman at MIT. The method is based on understanding principles of feedback loops that forms structure of any system constellation. Business Dynamics is the opposite to the linear, event -> consequence, thinking.
Regardless how much complex it sounds, it is not that bad… Although the method itself is designed for computer simulations that consist of number of integral equations, you can use its simplified version with pen, paper and set of basic rules.
How to create simplified Business Dynamics model
The best is to work in a group and discuss. Because your model will change as you work on it, my tip is to use large sheet of paper and post-its for the model variables. When you need to change the model, just rearrange the post-its and redraw the lines connecting them.
- Identify variables that occur in the problem (write them on post-its). Variable is something that you can assign a value. For instance, weather is not variable. But outside temperature is.
- Identify direct relations between the variables, connect them with arrow showing which variable is the influencer and assign polarity + or – to the relation. Plus means that both variables move in one direction (when the first one raises or decreases the influenced variable also increases or decreases). Minus means they grow or decrease in opposite direction.
- Add more variables and relations as you continue to analyze the problem
- Look for feedback loops, closed circles of linked variables, to predict system behavior. When you count all plusses or minuses on a feedback loop, you may see positive, reinforcing feedback loops that cause exponential growth. Negative, balanced feedback loops seek equilibrium.
- Read your model, follow the feedback loops and play with growth or decrease of values of your variables to identify the solution
Island Borneo bubonic plaque outbreak – test your complex problem-solving skills!
Here’s a problem that actually happened. Because people’s lives were in stake, the decided solution must have been proved to be right before applying it. The team that solved this issue used Business Dynamics method.
On the island Borneo, villagers were dying of the Bubonic plague. Seemingly unrelated to the problem, roof beams in the village are collapsing and a swarm of dead fish have washed up on the river banks. The plague is being caused by rats that transmit the disease to humans through bites. Bubonic plague causes human death, but rats are not affected, they only transmit the disease. But why have the rats suddenly started biting humans?
You have found the following facts:
- On Borneo island it rains a lot
- Villages are built from palm leaves and beams
- Recently, there was used DDT to kill mosquitoes who transmit malaria (DDT is now banned toxin cumulates in the body of living organisms, DDT was used in agriculture before its severe side effects were discovered)
- Bubonic plague is spread by rats
- Cats are now catching geckos; but in the past, geckos usually escaped cats
- Villagers bread cats to prevent rats from coming to villages from jungle
- Geckos are very slow due to DDT, but do not die
- Cats die due to DDT
- Geckos eats cockroaches and caterpillar who live in cribs
Problem to solve:
What must be done to save the villagers from more bubonic plague, falling cribs and dead fishes?
I used Business Dynamics method for several years as part of my Strategic Management course for MBA students. Island Borneo was favorite exercise for my students. Complex problem-solving is definitely a skill that can be learned and trained. Let me know if you would like to learn more.