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What is System Dynamics, and Why should I Care?
What do climate change, social systems, businesses and bathtubs all have in common?
They are all interacting systems of people and entities from the natural and man-made world. System dynamics is concerned with understanding how these systems really work: what drives them and causes the behaviour we see? What can we do to improve these systems? And what must we not do, to avoid making them worse?
Many apparently different social and physical systems have similar underlying structures and can be described using the same simple ideas. System Dynamics provides the tools to analyse the way such systems work – tools ranging from simple, effective diagrams through to full scale computer simulations capable of replicating the behaviour of the most complex system – all designed to help us understand why systems behave the way they do, and what is likely to happen if we make changes to them.
So what is a system?
According to Collins Dictionary, a system is “the manner in which the parts of something fit or function together”. System Dynamics is concerned with how that collection of parts operates as a whole, over time.
For example, businesses are classic systems. They consist of stocks and flows of people, money, information, physical goods and materials all interacting together and in constant flux over time. The people in the business make decisions based on information about the world around them, and as they make those decisions – to order more goods, hire more staff, invest more capital – they change how the business performs and interacts with its environment.
This, in turn, changes the decisions they and their colleagues or rivals make in the future, resulting in feedback. Feedback occurs in many real world situations, and often causes complex behaviour that is hard to understand. It is also one of the central concepts System Dynamics is designed to tackle.
Good practical System Dynamics work begins with expert knowledge of whatever is being studied: we cannot understand a business as a system unless we know how it operates; we cannot understand the climate system without knowing about the physics and chemistry of the atmosphere; we cannot understand the credit crunch of 2008 as a system without knowing how the international banking system operates.
Often this expertise is concentrated in groups with detailed knowledge of just parts of the whole system. People might be experts on particular aspects of businesses, of the climate or of the international finance system. The ‘value added’ of System Dynamics is to take those parts and show what happens when they are put together in a whole dynamic system.
It’s classic big picture stuff.