During the course brief, the instructors mentioned that the Business Dynamics classes will be intensive on thinking. Today, we experienced that.
We took a step towards modeling phenomena by learning to construct causal loop diagrams (CLD). We started with some simplified phenomena with just two variables like birth and population and later moved onto phenomena with more variables.
The CLD helps us to move away from the common but unreal linear cause-effect model.
Here’s a video introduction to Causal loop diagrams: Introduction to Causal Loops
During the discussion, we had to invariably touch upon correlation vs causation. Just always remember that correlation does not necessarily mean causation.
We built stories around CLDs that were shown on the screen. I was soon able to appreciate the power of this approach to thinking about phenomena. We then started to map the behavior of the models. Balancing loops are equilibrium seeking and the reinforcing loops keep moving away from equilibrium.
Our next task was to come up with a CLD for the beer game we played last week. The idea is to know the behavior of the system and then figure out the model that will describe this behavior. Here, we learned to add delay to the model.
Here’s a little more complex CLD capturing the piracy phenomena which contains multiple loops: Piracy Causal Loop Diagram
How can consultants apply this?
The biggest takeaway in applying this approach to business problems is this: If you see that an oscillating behavior in an organization with respect to a particular phenomenon, then we could conclude that this behavior is caused by a balancing loop and a delay. Having identified this, we can go forward to break the balancing loop or reduce the delay.
This is hard but very exciting. I understand that I need to spend a lot of time to get a grasp of it and then effectively apply to a particular phenomenon.
. . .
I’ve been uninspired for the last couple of days. I made the jump to personalize my room a tad. Nothing much, a couple of wall stickers or posters. One had to be a large wall art of the world – a symbol of my desire for exploration, the vastness of our world and the sense of perspective that brings to me. The second was something I just came across while I was just looking for interesting posters. It is a poster from the film The Sound of Music. A picture of Maria (Julie Andrews) feeling exuberance on the hills. The mood of the film and the character Maria has always inspired positivity and light spiritedness in me. This poster will be a reminder of that.
I understand how important it is to create a space of our own and add little things to your environment.