Solving Complex Problems

To solve complex business problems we like to think we identify the problem, gather data, evaluate alternatives, select a solution, and implement it. If only! In fact, not to mention the law of unintended consequences, complex problems never fit this open-loop trajectory. Instead, they have many circular, interlocking, sometimes time-delayed relationships among their components, so that solutions require continual feedback, looping back, and a dynamic approach to design.

Unfortunately, open-loop thinking is a difficult mental model to escape from. What's more the mental models we have are always determined by the system in which we are embedded. The system is at the root of all problems, according to MIT Sloan professor John Sterman. We don’t have separate problems related to marketing, finance, or operations they all stem from the system.

"People don't have separate problems,” says Sterman. “They just have problems, and when we insist on dividing the world into silos and acting locally, our problems usually get worse." The solution, he says, in fact a core idea of systems thinking, “is to help people understand that they are embedded in systems that often mould their behaviour in ways they don’t appreciate, and that it's their job to design the systems in which they operate and their direct reports operate."

Conceived at MIT in the mid-1950s, by the late Professor Jay Forrester, ‘System Dynamics’ is a powerful framework for identifying, designing, and implementing solutions for complex challenges. A methodology that is more relevant than ever today in our increasingly complex business world, characterised by the fusion of technology and human endeavour; a world in which senior leaders no longer feel they have the skills to intervene effectively, into the complexity, to make a positive difference.

Any leader faced with the multifaceted challenges typical of modern organizational life can benefit from learning the principles of systems dynamics and using it to understand complex situations and the dynamics those situations produce. And with understanding implementing system dynamics practices to design better operating policies, understand complexity, and guide effective change.

Many of the programs in MIT Sloan Executive Education’s portfolio incorporate systems thinking, and the following courses in particular focus on real-world problem solving using this tool:

Understanding and Solving Complex Business Problems presents an introduction to System Dynamics. Through exercises and simulation models, participants experience the long-term side effects and impacts of decisions and understand the ways in which performance is tied to structures and policies.

Business Dynamics: MIT's Approach to Diagnosing and Solving Complex Business Problems is a week-long, hands-on program that offers a deep dive into System Dynamics, including tools and techniques that you can apply to participants own business environment as soon as they complete the program.

Participants in both programs, through intensive, hands-on workshops and interactive experiments, are exposed to the principles of systems thinking and practical methods for putting them into action. They will be introduced to a variety of tools, including mapping techniques, simulation models, and MIT’s management flight simulators—such as the Beer Game: a table game developed by Jay Forrester, that illustrates the nonlinear complexities of supply chains and the way individuals are circumscribed by the systems in which they act.

Professor John Sterman talks about system dynamics in this short video