System Dynamics and the
O-O-D-A Maneuver Approach to
Change Management
Winning Through Intuition and Analysis
Process Of Ongoing Improvement
Clarence J. Maday, Jonah
Professor Emeritus
Mechanical and Aerospace Engineering
North Carolina State University
CJMaday
2012
BACKGROUND
• Forrester’s Industrial Dynamics -- 1961, Sterman’s Business
Dynamics -- 2000
• Deming’s PDCA (including DMAIC) -- 1950’s …
• Profound Knowledge
• Hopp and Spearman, Factory Physics, 3rd Edition, 2008
• Boyd’s O-O-D-A Maneuver – Implicit Cascaded Feedback Dynamics,
Intuitive Application of the Principle of Optimality. Mental modeling
and mental simulation -- 1996
• Rizzo’s Model-Predictive Control -- 2010
• Goldratt’s TOC & TP -- 1984 + …..
• Casparis’ Management Dynamics -- 2004
• Debra Smith’s The Measurement Nightmare -- 2000
CJMaday
2012
EXCERPTS FROM THE POWER OF INTUITION BY GARY KLINE
• Neither analysis nor intuition alone is sufficient for effective decision
making. Therefore, we need to explore the connection between them,
highlighting what can go wrong if we rely excessively on intuition and what
can go wrong if we rely too much on analysis. p.64
• The synthesis between intuition and analysis that seems most effective is
when we put intuition in the driver’s seat so that it directs our analysis of
our circumstances. This way, intuition helps us recognize situations and
helps us decide how to react, and analysis verifies our intuitions to make
sure they aren’t misleading us. p.64
• Conditions favoring the Intuitive approach: Time Pressure, Ill-defined
Goals, Dynamic Conditions and Experienced Participants. p.67
• Conditions favoring the Analytical approach: Conflict Resolution,
Optimization, Justification and Computational Complexity. p.67
EXCERPTS FROM THE POWER OF INTUITION BY GARY KLINE(cont)
Strategies to Coordinate Analysis with Intuition, p.86
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Start with intuition, not with analysis.
Accept the zone of indifference. (Flip a coin)
Map the strengths and weaknesses of options without attaching numbers.
Use mental simulation to evaluate the options.
Simplify the comparisons.
Bring in the intuition of an outsider to check your analyses.
Don’t try to replace intuitions with procedures.
MOTIVATION
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This is my current view of the unification of the many flavors of the month in the business and management
literature. . all of them can be regarded as a menu of subsets of System Dynamics and Boyd’s O-O-D-A Maneuver.
For completeness I add Goldratt’s thought processes for change management. Of course, change management can
be seen as a subset of System Dynamics. Donnella H. Meadows emphasizes the dynamics of change. She brings
together disparate views of systems. In her ‘Thinking in Systems’ she opens with a 1979 quote from Russell
Ackoff:”Managers are not confronted with problems that are independent of each other, but with dynamic
situations that consist of complex systems of changing problems that interact with each other. I call such situations
messes…. Managers do not solve problems, they manage messes.” I suggest that Ackoff’s managers were not
fluent with Forrester’s Industrial Dynamics (1961).The work of Forrester, Sterman and, more recently, Boyd brings
order to these “messes”. See especially Sterman’s Business Dynamics and the archived journals of the Systems
Dynamics Society.
I recommend Chet Richards web site, Fast Transients. The name is most appropriate.
Change is a dynamic process as seen in O-O-D-A and System Dynamics, both supported by Newton’s Calculus and
“Laws” of Motion.
There are several views of change/dynamics in the management/business community. They include
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System Dynamics
O-O-D-A
Monte Carlo methods
Event Driven Systems
Buffered Systems such as DBR , Critical Chain, Cost and Revenue Flows (Caspari and Caspari)
CJMaday
2012
O-O-D-A
• Observe-Orient-Decide-Act
• It is a loop that contains internal or cascaded
feedback.
• Richards calls it a “loop” with power.
CJMaday
2012
SOME NEXT BIG THINGS
•
Let’s look at two successful BIG THINGS first; Man on the Moon and Return;
CURIOSITY ROVER on Mars.
– The APOLLO mission made extensive use of Newton’s “Laws” of Motion, Computers, and some
very sophisticated Mathematics (variational calculus), Engineering and Physics. Project
management was a real challenge so people skills were needed and used.
– The CURIOSITY mission; all the above and much more; adaptive control systems and
unmanned guidance, especially at Mars since it takes minutes for a signal to be transmitted
from Earth to Mars.
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IMO one next ‘big thing’ will be the acceptance and implementation of
dynamics of change. TOC has led the way with its emphasis on buffers that
change with time. In BUSINESS DYNAMICS, buffers are “stocks” connected by
“flows”, (similar to DBR). Mathematically, these are parts of conservation
principles; STORAGE RATE = INPUT RATE - OUTPUT RATE + CREATION RATE –
DESTRUCTION (DECAY) RATE.
SYSTEM DYNAMICS and O-O-D-A complete the picture with the incorporation
of time in the decision making processes. TOC is similar with its Thought
Processes approach to change. The ‘people aspects’ of change, the dynamics
of change, can be modeled and simulated as done by Forrester and Sterman.
SOME NEXT BIG THINGS (cont)
• J.W.Forrester wrote, ”Knowledge about the system includes an
understanding of the problem that is to be corrected. One does not
model a system, one models the cause of the problem. The first
requirement on a model is that it must show how the problem of
interest is being caused. Only after understanding the cause does
one move on to an improvement”
• Not too different than Deming’s Profound Knowledge.
• Goldratt’s Thought Processes provide a convenient starting point for
the dynamics of change. Looks like a good PhD dissertation(s).
• This will put us on the way to “Decision–by–Wire”, an even bigger
NEXT BIG THING. Why not? We have fly-by-wire aircraft and the
beginnings of drive-by-wire cars. Decision-by-wire follows.
APPROACH
1.
2.
3.
4.
5.
OBSERVE AND MEASURE CURRENT STATE; CASH. MATERIAL, INFORMATION
SET AND QUANTIFY GOALS
COMPARE AND MEASURE THE DIFFERENCES
ORIENT - PRIORITIZE THE DIFFERENCES
DECIDE - STRATEGY
1.
2.
3.
4.
6.
7.
8.
9.
ANALYTICAL MODEL OR INTUITIVE MODEL
ANALYTICAL SIMULATION(MONTE CARLO, BUSINESS DYNAMICS) OR INTUITIVE SIMULATION(MENTAL)
WHICH DIFFERENCES TO REDUCE AND BY HOW MUCH
CONTROL ALGORITHM
ACT - TACTICS
MEASURE RESULTS - OBSERVE AGAIN
REFINE MODEL AND/OR GOALS AS NEEDED
RETURN TO 1. AND REPEAT.
THIS IS A COMBINATION OF THE WORK OF GOLDRATT, BOYD, FORRESTER AND STERMAN; THE PROCESS
OF ONGOING IMPROVEMENT (POOGI).
CJMaday
2012
DYNAMICS OF CHANGE
O-O-D-A
JOHN BOYD
SYSTEM DYNAMICS
JAY W. FORRESTER AND JOHN STERMAN
INTUITION
THOUGHTWARE
HUNCHES
ANALYSIS
SOFTWARE
DIGITAL
PROFOUND KNOWLEDGE
MENTAL MODELS
MENTAL SIMULATION
PROFOUND KNOWLEDGE
ANALYTICAL MODELS
ANALYTICAL SIMULATION
CONTROL ENGINEERING FORMAT
COMPARE
+
ORIENT
CONTROL
ALGORITHM
DECIDE
INTUITION
ANALYSIS
ACT
PLANT
SYSTEM
RESULTS
OUTPUT
GOALS
OBSERVE
Feedback
CMaday
2012
O-O-D-A, POOGI, SYTEM DYNAMICS
Analysis Intuition, Feedback and Feedforward everywhere
OBSERVE
Current
Reality
COMPARE
Goal(s)
What to
Change to
ORIENT
STRATEGY
DECIDE
What to
Change
TACTICS
ACT
Implement
Changes
SYSTEM
(BUSINESS)
DYNAMICS
RESULTS
•MODEL
•ACTUAL
•MODEL
•ACTUAL
CJMaday
2012
OBSERVE
• Set Goals ( Legally, Ethically and Morally)
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Victory
Money
Mislead or Confuse Opponent
Your Goal?
• OBSERVE Current Reality; Compare With Goals;
then Work to Realize the Goals. Get and absorb
all the information you can by whatever means
possible. This usually takes time, years even. Can
we do it faster? We had better!
ORIENT
• ORIENT
• This is the essence of the process and is supported
by the Observe, Decide and Act contributions.. It
is formed at least by genetic heritage, surrounding
culture, experience and previous learning.
• The mind combines all or part of this background
to form the “many-sided cross-references”,
implicit and explicit, which then become a new
orientation.
ORIENT(cont)
• ORIENT
• Seek out and find data that don’t fit your conventional wisdom
or biases….QUICKLY!!
• Analysis and Synthesis
• Axiomatic Design
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System
Project
Process
Product
• Optimization
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• TRIZ
Design of Experiments
Design of Components
Dynamic Programming
Linear Programming
Variational Calculus
ORIENT (cont)
• Available Tactics Menu - Factory Physics which Include
or is augmented with
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Constraints Management (TOC)
Drum-Buffer-Rope
Supply Chain Management
Lean
6 Sigma
Slack
Finite Capacity Scheduling (FCS)
CONWIP
JIT
Kanban
CJMaday
2012
ORIENT (cont)
• Available Tactics (cont)
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QFD
MRP I and II
ERP
Efficiency
Cash Flow
Material Flow
Information Flow
…….
…….
CJMaday
2012
DECIDE
• DECIDE
– Intuitive competence or implicit decision making
(agility) based on Observation, Orientation and
Profound Knowledge.
– Explicit analytical decision making based on System
Dynamics modeling and simulation, Optimality
Principle or Dynamic Programming, Design of
Experiments, TOC, Lean, Six Sigma, TRIZ, Monte Carlo
Methods et al. This can lead to software competence.
Current computational speeds provide some agility.
– Set Strategy
ACT
• ACT
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Deception
Ambiguity
Generate Surprise and Panic
Seize the initiative and keep it
Practice, Test and Evaluate
– Equivalent to Complex ans Chaotic Domains in Cynefin
Framework
– Implement Tactics
INTUITIVE COMPETENCE
and
ANALYTICAL COMPETENCE
• Rizzo points out
– that humans handle small systems; such as cars,
bicycles, some aspects of flight and video games.
This uses intuitive competence.
– that humans cannot handle large systems; such as
open loop unstable aircraft, power plants, large
airports, etc. This requires modeling competence
(aka decision-by-wire or analytical competence)
CJMaday
2012
OVERVIEW
• Merge/Integrate Business Dynamics, Factory
Physics, and O-O-D-A to form an innovative and
winning strategy in competition. O-O-D-A
contains much, if not all, of Sun Tzu’s Art of War
and Deming’s Profound Knowledge.
• The term “dynamics” is used in the systems or
engineering sense, continuous, discrete,
deterministic, stochastic.
• Merge these concepts using a feedback control
system framework to confuse, outsmart, and
overcome your opponent and achieve your goal.
CJMaday
2012
APPROACHES AND TOOLS
• Decisions within decisions. Cascaded feedback system.
Variation and Disturbances may be manageable.
• Qualitative and Quantitative approach to problem
solving.
• Value Streams (Cash, Material, and Information)
• Profound knowledge.
• Intuitive (implicit/mental) competence – small systems.
• Analytical (explicit/digital) competence – large systems.
CJMaday
2012
PDCA
• Deming’s Plan-Do-Check-Act. Can be
enhanced by adding a 5th step, Evaluate,
followed by a feedback loop to return to Plan.
Chet Richards might refer to this as the PDCA
“loop” with power.
CJMaday
2012
SYSTEM DYNAMICS
• System Dynamics
– Model the system to be controlled
– Controller dynamics – feedback
– Simulation
• Software Competence
• How does change occur?
CJMaday
2012
OVERALL GOAL
• CREATE DISORDER AND CONFUSION OUTSMART THE COMPETITION - WINNING
STRATEGY
– Faster decision cycle-----air-to-air-combat,
intuitive competence
– Different decision cycle-----outside the box
– Decision-by-wire competence (System Dynamics)
CJMaday
2012
Feedback Diagram
• This diagram is not meant to be unique. It is a
guide to be used in your situation. Essential
features include feedback and Implicit
Guidance and Control. It is qualitative but
becomes quantitative when applied.
CJMaday
2012
OVERVIEW REVIEW
Intuition, Feedback and Feedforward
OBSERVE
Current
Reality
Goal(s)
What to
Change to
Compare
goal(s) to
current
reality
ORIENT
STRATEGY
DECIDE
What to
Change
TACTICS
ACT
Implement
Changes
SYSTEM
(BUSINESS)
DYNAMICS
RESULTS
•MODEL
•ACTUAL
•MODEL
•ACTUAL
CJMaday
2012
OVERVIEW
• TOC, Drum-Buffer-Rope and Critical Chain Project
Management use buffer management such that
the buffers provide the feedback signals that
allow the control processes to successfully deal
with variation.
• Is buffer feedback the reason for their
effectiveness? IMO YES!
• CONWIP is a process that combines feedback and
feedforward implicitly. Total WIP is controlled
explicitly. An innovative and insightful approach;
clever, that is!
MORE OVERVIEW
• Apply System Dynamics and O-O-D-A
• Identify the problem, make sense of it
• Use Cynefin Framework to Orient or
categorize problem
– Simple or Complicated = Small; Implicit or
Intuitive Decision Making
– Complex or Chaotic = Large; Explicit Decision
Making -- aka Decision-by-Wire
CJMaday
2012
Some Necessary Requirements
• Profound Knowledge
• Understand goal and context – choose form of
decision analysis
• System Dynamics Model
– Implicit and intuitive
– Explicit computer model
• Feedback algorithm
CJMaday
2012
WHAT NEXT?
• How to sell Analytical Decision Making?
• How to model the system?
• HOW TO BRIDGE THE GAP BETWEEN
ANALYSIS AND INTUITION ? (Many thanks to
Jim Bowles for this input!)
CJMaday
2012
References
• Science, Strategy and War, F. P. B. Osinga, Routledge
2007
• The Power of Intuition, Gary Klein, Random House
• Industrial Dynamics,J. W. Forrester, The MIT Press,
1961.
• Business Dynamics, John Sterman, McGraw Hill 2000.
• The Art of War, Sun Tzu, Filiquarian Publishing
• Model-Predictive Control, A. Rizzo, PDI institute, 2010.
• Kelvyn Youngman, www.dbrmfg.co.nz
CJMaday
2012
References (cont)
• “A Leader’s Framework for Decision Making”,
David J. Snowden and Mary E. Boone, Harvard
Business Review, November 2007.
• Certain to Win, Chet Richards, Xlibris 2004
• Fasttransients.wordpress.com, Chet Richards
• The Mind of War, Grant T. Hammond,
Smithsonian Books, 2001
CJMaday
2012
ACKNOWLEDGEMENTS
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Jim Bowles
Clarke Ching
Steve Holt
Larry Leach
Rob Newbold
Tony Rizzo
Robert Roy
Jack Vinson
Scott Weller
Kelvyn Youngman
CJMaday
2012