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Rockefeller College of Public Affairs and Policy University at Albany
An Introduction to System Dynamics
George P. Richardson Rockefeller College of Public Affairs and Policy
University at Albany, State University of New York
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Rockefeller College of Public Affairs and Policy University at Albany
Events and Decisions
Patterns of Behavior
System Structure
Reactive
Adaptive
Generative
A Systems Perspective
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Rockefeller College of Public Affairs and Policy University at Albany
A systems view stands back just far enough to... • Deliberately blur discrete events into patterns of
behavior • Deliberately move from a focus on individual
decisions to a focus on policy structure
“Distancing...”
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Rockefeller College of Public Affairs and Policy University at Albany
Four Key Patterns of Thought
• Dynamic thinking (graphs over time) • Causal thinking (feedback loops) • Stock-and-flow thinking (accumulations) • Thinking endogenously (system as cause)
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Rockefeller College of Public Affairs and Policy University at Albany
New York, Chicago & Philadelphia, 1800-2000
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Rockefeller College of Public Affairs and Policy University at Albany
Prejudice and Minority Achievement (Myrdal, Merton)
Prejudice
Discrimination
Opportunities for the minority
Achievements of the minority
– +
– +
(R) Prejudice
Aspirations of the minority
Minority efforts to achieve
Minority perceptions of the gap
+
+
–
+
(B) Striving
+ (R)
Hope or despair
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Rockefeller College of Public Affairs and Policy University at Albany
Stocks, Flows, and Feedback Loops Here: a gasoline shortage crisis
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Rockefeller College of Public Affairs and Policy University at Albany
Dynamics
• Define problems in terms of graphs over time. • Graph important variables • Graph historical data • Graph anticipated dynamics • Graph preferred dynamics
• Use these to focus systems thinking and modeling
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Rockefeller College of Public Affairs and Policy University at Albany
U.S. Unemployment 1948-2012 (annual average %)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1948 1958 1968 1978 1988 1998 2008
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Rockefeller College of Public Affairs and Policy University at Albany
Carbon Emissions 1800-2000
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Rockefeller College of Public Affairs and Policy University at Albany
• Accumulations (populations, resources…) • Causal structure: “feedback” loops • Delays • Perceptions (a kind of accumulation) • Pressures • Affects, emotions, (ir)rationalities • Policies governing decisions
Systems Structure
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Rockefeller College of Public Affairs and Policy University at Albany
Causal Diagrams
• Causal mapping is a powerful tool for representing structure in complex systems.
• Arrows indicate causal influence.
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Rockefeller College of Public Affairs and Policy University at Albany
Polarities of Causal Links
• Positive and negative signs show the direction of causality:
– +
+ –
+ –
+ ... “direct” relation – …“inverse” relation
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Rockefeller College of Public Affairs and Policy University at Albany
Feedback Loops
A feedback loop exists when decisions change the state of the system, changing the conditions and information that influence future decisions.
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Rockefeller College of Public Affairs and Policy University at Albany
Two kinds of feedback loops
• Reinforcing loops • Growth producing • Destabilizing • Accelerating • Positive: an even number of –’s
• Symbolized by
• Balancing loops • Counteracting • Goal seeking • Stabilizing • Negative: an odd number of –’s
• Symbolized by
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Rockefeller College of Public Affairs and Policy University at Albany
Examples of Reinforcing Loops
+
+
+ +
+
+ +
– –
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Rockefeller College of Public Affairs and Policy University at Albany
Typical Reinforcing Loop Behaviors 20,000
15,000
10,000
5,000
0 0 25 50 75 100
10,000
9,000
8,000
7,000
6,000 0 25 50 75 100
Population and Births Loop
Businesses and Taxes Loop
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Rockefeller College of Public Affairs and Policy University at Albany
Examples of Balancing or Counteracting Loops
+
–
+
+ –
-
+
+
–
+
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Rockefeller College of Public Affairs and Policy University at Albany
Typical Counteracting Loop Behaviors 20
15
10
5
0 0 10 20 30 40
Filling a Glass
10,000
7,500
5,000
2,500
0 0 25 50 75 100
Population and emigration
•0 •7.5 •15 •22.5 •30
Predator-prey interactions
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Rockefeller College of Public Affairs and Policy University at Albany
But There are Subtleties: Not all Word-and-Arrow Diagrams are Alike!
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Rockefeller College of Public Affairs and Policy University at Albany
These arrows mean ‘and then’
• We start with some understandings of the problem and its systemic context, and then we conceptualize (map) the system.
• Then we build the beginnings of a model,
which we then test to understand it. • Then we reformulate, or reconceptualize,
or revise our understandings, or do some of all three, and then continue…
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Rockefeller College of Public Affairs and Policy University at Albany
Arrows here are flows of material The words here represent accumulations of carbon –stocks -- and the arrows represent flows. This is not a causal diagram. This is a view of the “carbon cycle.”
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Rockefeller College of Public Affairs and Policy University at Albany
Only this one is a causal loop
This causal loop tells a very compelling and important self-reinforcing story.
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Rockefeller College of Public Affairs and Policy University at Albany
Stocks and Flows
Stocks are accumulations. • Stocks are increased by inflows and decreased by outflows. • When a link means “add” or “subtract” we have a stock-and-
flow structure. • Example: Inventory
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Rockefeller College of Public Affairs and Policy University at Albany
Human Activity, CO2, and Global Temperature
Thought experiment:
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Rockefeller College of Public Affairs and Policy University at Albany
The system dynamics modeling process
Adapted from Saeed 1992
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Rockefeller College of Public Affairs and Policy University at Albany
Processes focusing on system structure
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Rockefeller College of Public Affairs and Policy University at Albany
Processes focusing on system behavior
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Rockefeller College of Public Affairs and Policy University at Albany
Two kinds of validating processes
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Rockefeller College of Public Affairs and Policy University at Albany
Pictures Can Get Really Complicated!
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Rockefeller College of Public Affairs and Policy University at Albany
The Endogenous Point of View The “X/N” Matrix
Striving for understanding and
leverage, but failing
Achieving understanding and
leverage
Accepting fate, Predicting, Preparing
Confused, Misguided, Misguiding
Exogenous Endogenous True (Predominant) State of Affairs
Exog
enou
s En
doge
nous
Pred
omin
ant M
ode
of A
naly
sis
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Rockefeller College of Public Affairs and Policy University at Albany
A Lightening-Fast Example
• Security on off-shore oil platforms during a technology transition
• Mixed consulting / theory building intervention • Two group model building workshops, May and
September with various high-level management people from Norsk Hydro and related professional groups
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Rockefeller College of Public Affairs and Policy University at Albany
Hopes and fears
Find a common case for all
(AUC,SINTEF, HYDRO)
HYDRO is new to group modelling
We do not catch Hydro’s interest
Hope Hydro becomes very
involved
focus on security
to much focus on safety
Establish a Platform for
Communicating SD for Hydro.
Clear Picture of Workshops down
the road
Too little time to be successful
How to simulate Risk/Stress
Establishing a SD Model that gives no
new insights
Get a firm understanding
system dynamic mapping
Centrifugal Forces blow AMBASEC, IRMA, HYDRO
apart
Scenario discussions
Getting lost in detail
This SD-Modell does not improve security (& safety)
in e-Operation
Consensus about 3 yr agenda
come up with a useful case/ model
Establish a SD Model giving new
insight
Will get a few really dynamically interesting cases
come up with some artificial case
Identify valuable insights for all
Understanding of integrated operation
More safe & secure e-operations
Hopes Fears
Process will help Hydro understand what may happen
Someone on-shore will inadvertently
intervene off-shore
Norsk Hydro may not be the right
case
We don’t understand the
situations
Some managers think we should never open the
platforms
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Rockefeller College of Public Affairs and Policy University at Albany
Stakeholders
INTEREST
INFL
UE
NC
E
CRO Control Room
Operator
Management Crises Team
Interval Intruder Attacker
CIO
Control Room Manager
Organized Crime
PLATFORM CHIEF
Chief Executive Officer
Government Incident
Response Team Member
Incident Response
Team Manager
Terrorists
Operator
Supplier (maintenance of
PCs/ESD)
Service Supplier (handling within
their organization)
MALICIOUS OUTSIDER
SYSTEM ADMIN
CISO (Chief InfoSeq.
Officer)
PTIL
Local Communities/
Generel, Public
SOFTWARE PROVIDERS
Developers of COTS
CSIRT in a virtual
organisation
HSE responsible
STOCK OWNERS
DEVELOPERS OF ATTACK
TOOLS
COMPETING OIL COMPANY
MEDIA OLF
IT EXPERT (Support)
OIL COMPANY (System Owner)
Worker (uses IT systems)
The one detecting the
incident
ECOLOGICAL ACTIVISTS
NSM
Managers of unsecured
external networks
National Politicians
Work planner / administrator
NPD PSA DSB
Local Politicians
Contractors doing drilling &
modification fixed platforms
Prioritization by group members
Added day two
Nature
People responsible for e-
Op Change processes
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Rockefeller College of Public Affairs and Policy University at Albany
Behaviour over time
Overview
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Rockefeller College of Public Affairs and Policy University at Albany
Policies
Higher level of security
Improve the safety and
security culture
share and learn from incident B/W Orgs. & W/n Orgs
Annual awareness campaigns measures
security culture
Increase the amount of
incident reports from IRT & CEO
Be open about security incidents
Establish common risk perception
improve incident reporting
Establish CSRS
Increase knowledge information
sharing across industry
Cooperation between IRTs in
different organisations
Prevent out of sight out of mind mentality
Build IDS to systematically
gather information
Create formal CSIRTS
Increase CSIRTS authority
a warning system for the communication
network
Training to close knowledge gap
Perform Pilots do intrusion tests
and spread success stories
Identify ‘Best practice’ other countries other industries
Invest in survivability Solutions
Perform HazOp of the e-
operation solution of 2010
Invest in Vulnerability
Detection
Balance work & RD of CSIRT
Risk assessment in change processes
(continuously)
Common security
requirement on products and
services
Understand the erosion of
compliance
Establish common system incident
report management
-common report in –publish incidents
in industry
Establish Best /Good Practice Against Insider
Threat
Establish a security Quality
process improvement
Monitor/Measure Risk Change
(Auditing)
Create collaborate
arena & culture for information
sharing on-shore / off-shore
Prioritization by group members
Added day two
Continuous training
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Rockefeller College of Public Affairs and Policy University at Albany
A Tiny Model Capturing the Problem Dynamics
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Rockefeller College of Public Affairs and Policy University at Albany
A Tiny Model Capturing the Problem Dynamics
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Rockefeller College of Public Affairs and Policy University at Albany
A Tiny Model Capturing the Problem Dynamics
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Rockefeller College of Public Affairs and Policy University at Albany
• Traditional capacity (blue) phasing out • New capacity (red) rising, peaking and declining • Mature capacity (green) slowly rising • Cost per barrel (black) declining to a new low • Risk (grey) rising, peaking, and declining • …all just what the problem description called for
Behavior of this Tiny Beginning Model
But vastly oversimplified. Serious group modeling was needed.
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Rockefeller College of Public Affairs and Policy University at Albany
Group Modeling Work in Process
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Rockefeller College of Public Affairs and Policy University at Albany
After Much Client and Team Work – “Hydro1”
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Rockefeller College of Public Affairs and Policy University at Albany
Policy Simulations with Hydro1
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Rockefeller College of Public Affairs and Policy University at Albany
When It Works, Why?
• Engagement • Mental models • Complexity • Alignment • Refutability • Empowerment