The World Bank Uses System Dynamics to Identify Root Causes of Poverty
EXECUTIVE Summary
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Madagascar has one of the highest poverty rates in the world. In 2022, an astonishingly three out of every four people in Madagascar lived below the poverty line.
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Poverty has proven to be particularly resistant to previous policy interventions. Hence, the World Bank decided to turn toward system dynamics to identify the systemic causes of the problem.
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Working with focus groups across the country, this project developed a causal loop diagram that clearly illustrated vicious cycles that stakeholders see as direct contributors to poverty. It allowed stakeholders to identify potential leverage points to develop anti-poverty programs in Madagascar.
#WorldBank #Poverty #Madagascar
The Problem
Poverty in Madagascar has remained persistently high and somehow complex, despite many attempts to reduce it through anti-poverty policies and interventions. As shown in the Macro Poverty Oulook, the share of the population living in poverty (US$2.15 in 2017 PPP) was 81.7% in 2020, 81% in 2021 and 80.6% in 2022.
One of the reasons why past anti-poverty policies have had less than desired success in reducing poverty is the limited understanding of its determinants. Empirical investigations of the determinants of poverty often use linear specifications that regress objective measures of poverty such as income or consumption against observable indicators theoretically justified to explain poverty.
To uncover the root-causes this analysis used a systems thinking approach to characterize a high-level, dynamic, and multi-dimensional view of the poverty trap with Causal Loop Diagrams (CLD) generated from focus group discussions in 6 provinces across the country.
The Solution
The World Bank organized a series of focus groups across a variety of diverse communities within judiciously selected communes in Madagascar. The aim was to identify, understand, and address the unique poverty challenges they face, and to enrich these findings with qualitative data. These focus groups were intentionally structured to spark discussions about the primary obstacles encountered by the communes. Insights from participants across different ages and genders were used to deconstruct these challenges into several root causes. Each root cause was further distilled into simpler, more comprehensible sub-causes.
The causes and their corresponding sub-causes were reanalyzed after deconstructing the poverty issues faced by each commune. This allowed for diligently examining the intricate interconnections that define these challenges. Special emphasis was given to understanding the interactions among various sub-causes and the overall impact on the system. Specifically, we identified reinforcing patterns or loops that sustain poverty and negate efforts by both individuals and policy interventions to alleviate it. In the end, insights shed light not only into the economic determinants of poverty but also the cultural, political, and behavioral intricacies across different demographics, including gender, age, occupation, and community type (rural/urban).
Analyzing poverty by amplifying the voices of the impoverished and evaluating qualitative data was influenced by a seminal World Bank book titled “Voices of the Poor: Crying out for Change.” This report harnessed focus groups across 23 countries to relay the experiences of the impoverished in their own words. In doing so, it underscored significant multidimensional aspects of well-being that had not been previously explored in conventional poverty analyses.
In addition to highlighting the voices of the impoverished and the crucial subtleties pertaining to their circumstances, this project incorporated systems thinking tools. This innovative approach enabled us to evaluate the qualitative data from the focus groups and discern the pivotal narratives and relationships explaining the perpetual cycle of poverty experienced by many households.

The Causal Loop Diagram is a partial representation of the multi-dimensional poverty trap from the perspective of urban households. The CLD identifies eight feedback loops representing the urban poverty trap that inhibits the group’s ability to:
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secure high income livelihood opportunities (R1)
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alleviate impact of cost of living (R2)
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uplift socio-economic status (R3)
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participate in decisions (R4)
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develop resilience to shocks (R5)
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mitigate increasing cost of business (R6)
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mitigate shocks to business (R7)
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enhance skills (R8)
Outcomes
Clearly addressing one or few sub-causes will not generate an overall change required in poverty trap situation. The systems thinking exercise proposes a portfolio of upstream and downstream entry points and pathways to improve the ability of communities to move out of poverty over time. This will inform design of projects by the World Bank to activate the identified entry points.
In particular, the project resulted on a list of potential interventions that are directly linked to the feedback loops driving the system. For example, one of the potential interventions could be to promote business and entrepreneurship. Stakeholders in the focus groups thought that training, mentoring, infrastructure, and financing support could help circumvent the current low levels of business and economic activities (R1), and to diversify employment opportunities (R8).
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The World Bank Uses System Dynamics to Identify Root Causes of Poverty
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Fast-Track Cities Uses System Dynamics to Enhance HIV Care
EXECUTIVE Summary
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Low levels of viral suppression at 69% for people with HIV make it hard to believe the 95% target level will be achieved by 2030 in St. Louis, USA.
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As a solution, Fast-Track Cities-STL opted to use group model building means to 1) gain understanding of the fragmented service landscape and 2) to empower the community to address causes of health inequality.
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The causal loop diagram revealed the importance of community-building for care engagement and created the foundation to build capacity by generating interest and commitment among participants. It also shed light on policies’ unintended consequences leading to service fragmentation and the need for rapid start programs to consider holistic social support for sustained care.
#Fast-Track Cities #HIV #Health #USA
The Problem
Levels of viral suppression at 69% for people living with HIV in St. Louis are far below the targeted goal of 95% required to end the HIV Epidemic in the City of St. Louis, U.S., by 2030.
To increase viral suppression, Fast-Track Cities- St. Louis created a subcommittee dedicated to expand access to rapid initiation of antiretroviral (ART) medication (also called Rapid Start) and to utilize a collaborative governance model to engage in consensus-oriented change. This initiative organized a series of group model building sessions, bringing together diverse stakeholders: those living with HIV, patient advocates, healthcare professionals, researchers, and policymakers. The objective of these sessions was threefold:
1. To identify structural barriers affecting the adoption and accessibility of Rapid Start services in St. Louis.
2. To comprehend the varying perceptions and mental models of providers and clients concerning HIV diagnosis and treatment.
3. To guide a standardized approach for implementing Rapid Start ART across different service providers.
Figure 1 – Behavior-over-time graph displaying the percentage of virally suppressed people receiving ART medication in the St. Louis region according to different outcome perceptions.

The Solution
The landscape of Rapid Start in St. Louis remains intricate. Despite three major healthcare providers rolling out rapid start programs, the data and insights from these initiatives have remained compartmentalized. Recognising this challenge, Fast-Track Cities-STL was compelled by the group model building approach as it offered an opportunity to map both the service provision landscape as well as important factors impacting quality HIV service while building capacity among communities. Fast-Track Cities-STL finds it incredibly important to utilize empowerment approaches to build a more agile, responsive public health HIV response.
Hence, the aim of Fast-Track Cities-STL was to use participatory group model building not only as means to uncover a greater understanding about the system of access to rapid start ART in the St. Louis region, but also to lay the groundwork for a grassroots community led collaborative in HIV care that aims at addressing the root causes of health inequities and outcomes. Fast-track Cities-STL anticipated that an interactive approach like group model building could help generate interest and community commitment in working on the solutions.
The resulting model combined insights from participatory GMB sessions involving those living with HIV in St. Louis, healthcare providers, and advocacy groups. The Causal Loop Diagram (CLD) crafted from this process comprised three reinforcing loops and eight feedback loops. Factors like mistrust, personal agency over health, peer support, and access to pivotal services emerged as the most influential determinants in the model’s behavior.
Figure 2 – The resulting CLD based on the GBM sessions.

Three fundamental feedback loops are highlighted. The “Problem of Delays” is a reinforcing loop where waiting for healthcare coverage causes individuals to lose their sense of control over their health. This diminished sense of control subsequently leads to decreased engagement within care spaces. Essentially, the longer the wait, the less control individuals feel, leading to even lesser engagement in care, creating a reinforcing cycle.
In the “Mistrust” balancing loop, experiences of racism and interpersonal stigma within the care system amplify mistrust. This heightened mistrust deters individuals from engaging with care, particularly in “non-peer-led groups.” As a result, they face a reduced risk of encountering cultural incompetency from providers. This loop underscores a critical insight: individuals who face racism and interpersonal stigma in care settings are more likely to disengage due to these negative experiences, balancing out their exposure to potential further harm.
The “Operation in Silos” balancing loop highlights how navigating care within bureaucratic silos makes individuals feel dehumanized, akin to “feeling like cattle.” This sentiment fosters greater mistrust, leading to decreased engagement in care. The more compartmentalized the care, the more individuals feel like mere numbers, leading to a balancing effect where they trust and engage less with the system.
Outcomes
The tangible outcome of the project was the CLD that participants developed and validated during the participatory group model building sessions. Key insights from the model revealed the importance of community-building opportunities for engagement in care, especially in the uptake of Rapid Start ART. The model also shed light on how some well-intentioned policies inadvertently led to service fragmentation and undermined the autonomy and peer support vital for those living with HIV. Furthermore, the model highlighted that the factors influencing the initiation of medication were intrinsically linked to the continuity of care. In essence, the model underscored the need for rapid start programs to holistically consider the social scaffolding essential for individuals to initiate and sustain care.
As aimed by the project, the Group Model Building approach also provided means to build capacity among communities disproportionately impacted by HIV and leverage their insights for system change. On the one hand, the insights offered by the model pointed out the importance of building community to generate engagement in care—including the uptake of Rapid Start ART. On the other hand, the project stimulated interest among participants and recruited them to continue their engagement with the organization; several individuals expressed a commitment to continue working on the project beyond the exercise.
Regrettably, a major setback led to a leadership vacuum, halting the initiative. Nonetheless, a participating organization has taken the baton, advancing the rapid initiation of ART services.
Do you want to know more?
Connect with Megan Keenan
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System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute
EXECUTIVE Summary
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The Portuguese Oncology Institute (IPO) faced a critical challenge in its intensive care unit (ICU) where doctors and nurses experienced high turnover due to tensions with surgeons and limited resources, ultimately leading to a high death rate. Surgeons accused ICU staff of holding patients longer than necessary, leading to a backlog in surgeries. Despite utilizing external ICUs, the issue persisted.
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Multicriteria and optimization approaches did not provide a solution. Only a System Dynamics approach using a management flight simulator enabled IPO’s leadership to understand the dynamics and discuss the causes and leverage points around the problem.
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Based on the System Dynamics model, the IPO established 10 new beds in the appropriate care units leading to the resolution of tensions and decreased turnover and death rates in the ICU.
#IPO #PatientCare #Oncology #Health #Portugal
The Problem
Despite the demanding nature of the work in IPO’s intensive care unit (ICU), doctors and nurses were passionate about their roles. However, the turnover rate was high due to strained relationships with their colleagues. Surgeons, who would only schedule delicate surgeries when the ICU had availability, accused the ICU staff of unnecessarily prolonging patient stays and not vacating beds promptly. As a result, the ICU became a bottleneck, leading to a growing waiting list for surgeries. To address the issue, management began utilizing external ICUs, but this did not alleviate the resentment or reduce turnover. Figure 1 displays the growth of the quitting rate of the IPO’s ICU waiting list, which is the rate at which patients leave the waiting list without being admitted to the ICU for surgery.
Figure 1 – Cumulative distribution of waiting list quitting rate

The ICU faced a high death rate, and care sharply declined when patients left for general wards, as readmission was rare due to bed shortages. To prevent readmission or premature deaths, the ICU kept patients until they were stable for general wards. Surgeons hesitated to operate on fragile cancer patients without available ICU beds. Despite being undersized, the ICU’s high cost per bed (equipment and staff) deterred expansion. IPO’s management hesitated to invest in ICU or intermediate care, as adjacent wards needed more beds for patients awaiting surgery. This compromised the organization’s performance.
The Solution
By employing the System Dynamics approach, stakeholders in the IPO’s ICU, including doctors, nurses, surgeons, and management, were able to gain valuable insights into the intricate interactions and dilemmas that existed. The approach provided a platform to examine the underlying causes of the tensions, identify the systemic drivers contributing to high turnover, and uncover the unintended consequences of certain actions. Figure 2 shows the causal loop diagram (CLD) that was developed along with the medical team and used to discuss the uses of a management flight simulator.
Figure 2 – CLD used for discussion with medical team

Through the use of the management flight simulator, stakeholders were able to witness the unfolding dynamics of the problem. This new understanding enabled IPO’s leadership to make informed decisions and take proactive steps to address the challenges. Figure 3 shows the core components of the System Dynamics model underlying the management flight simulator.
Figure 3 – Simulator core, showing the waiting list at the bottom

Outcomes
The application of the model had a significant impact on IPO’s management. As a result, a new Intensive and Intermediate Care Unit was established, reducing reliance on external ICUs and improving resource management. The ICU’s limited capacity and absence of intermediate care beds had previously led to high death rates and compromised patient care during the transition to general wards. Additionally, the practice of retaining patients in the ICU until they were fit for general wards caused delays in surgeries and increased costs.
With the opening of the new unit, equipped with 6 intensive care beds, 4 intermediate care beds, and 2 isolation rooms, these issues were effectively addressed. IPO’’s dependence on external ICUs was significantly reduced, leading to improved resource allocation within the organization. The expanded capacity and inclusion of intermediate care beds ensured smoother patient transitions and better continuity of care. Timely scheduling of surgeries enhanced efficiency and reduced costs while curbing death rates. The establishment of the Intensive and Intermediate Care Unit demonstrated IPO’s commitment to improving patient outcomes, resulting in a positive impact on both patient care and organizational performance.
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System Dynamics Helps Farmers Escape Poverty Trap in Guatemala
EXECUTIVE Summary
Guatemala holds the 4th highest global ranking for chronic malnutrition, and climate change is intensifying the challenges subsistence farmers face in providing food for their families. Utilizing a System Dynamics model facilitated meaningful discussions among various stakeholders and government entities, ultimately leading to the provision of strategic resources, such as livestock and expert guidance, for 152 families. This support enabled farmers to break free from the poverty trap and make valuable investments in their agricultural endeavors.
The System Dynamics model effectively illustrated the interplay between numerous variables, empowering farmers to comprehend and take control of key leverage points essential for their well-being and prosperity.
#Food security #Farmers #Agriculture #Guatemala
The Problem
Guatemala faces a staggering 55% prevalence of chronic malnutrition (a widely recognized indicator of food insecurity) in rural areas and ranks as 4th worst globally. Climate change is amplifying the difficulties subsistence farmers in Guatemala face in providing food for their families. Although climate change affects all food producers in various ways, subsistence farmers are especially vulnerable due to their limited access to irrigation and crop insurance, which could help mitigate the effects of fluctuating weather conditions. Furthermore, because subsistence farmers depend on their own production to feed themselves and their families, low yields and crop loss often result in malnutrition and starvation.
This underscores the need to understand how local farmers can collaborate and work with both local and central governments to enhance their food security.

The Solution
The model was developed using Group Model Building (GMB) and stakeholder engagement in two distinct communities. In each case, we collaborated with farmers and representatives from central and local governments to create causal loop diagrams that illustrated the primary relationships within their respective food systems and the variables influencing food security resilience in the face of climate change. This understanding was then converted into quantitative System Dynamics (SD) models, which facilitated discussions regarding potential policies.
The model comprises five main components:
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Maize local market: This component captures the primary dynamics of the local market using a traditional commodity model.
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Households: This element represents the dynamics affecting household cash availability and purchasing power, with revenues generated from maize production, livestock, and other activities.
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Livestock: This component illustrates the primary dynamics of livestock (specifically poultry) production on local farms.
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Soil: This part demonstrates the dynamics of organic nitrogen and organic carbon in the soil.
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Water and irrigation: This component captures the infrastructure used for irrigation and exogenous variables like rainfall.
The model features three main feedback loops:
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Commercial agriculture (R1): Revenue from maize increases household cash, which enhances their ability to invest in farming (such as seeds, fertilizers, and irrigation systems), resulting in improved soil quality and increased water uptake.
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Poverty trap (R2): A portion of maize production is allocated for self-consumption. The higher the proportion dedicated to self-consumption, the less maize is available for the market, which reduces revenue and subsequently investment in farming. Low investment in farming leads to low yields, further decreasing the amount of maize that can be sold.
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Reserves driving wellbeing (R3): Higher production rates result in more maize being available for self-consumption, reducing the need to spend money on purchasing food. This increases farmers’ available cash for investing in the next year’s harvest.

Outcomes
The policy recommendations from our study were utilized by local NGOs and government representatives to lobby their representatives in parliament and the Minister of Agriculture (MAGA). As suggested in the report, 152 families were provided with livestock in small quantities and supported by technical experts to develop small production farms.
This demonstrates the compelling nature of using System Dynamics in addressing complex issues, such as food security in the context of climate change. System Dynamics enabled to graphically represented the system through causal loop diagrams, providing a crucial visual aid that facilitated communication with local stakeholders in a way that other modeling approaches, mainly focused on mathematical formulations, could not achieve. Further, the emphasis on stocks in System Dynamics allowed for the effective representation of food stocks and key resources like soil organic matter, while maintaining model simplicity.
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System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute EXECUTIVE Summary The Portuguese Oncology Institute (IPO) faced a critical challenge in its intensive care unit (ICU) where doctors and nurses experienced high turnover due to tensions with...
Recent Posts
Call for Presenters: Seminar Series
Call for Presenters: Seminar Series We at the System Dynamics Society are continually seeking vibrant and knowledgeable presenters for our ongoing Seminar Series. As we unfold the calendar, there’s always a place for more insights, experiences, and expertise to enrich...
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference
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From Bergen to Global: UiB’s System Dynamics Group
From Bergen to Global: UiB’s System Dynamics Group The System Dynamics Group, an autonomous research group at the University of Bergen (UiB) was established in 1971 by professor emeritus Svein Nordbotten. Inspired by the work of Jay W. Forrester, Nordbotten...
Upcoming Events

Polarization Workshop 2023
“Directions of Polarization, Social Norms, and Trust in Societies: perspectives from Behavioral Sciences” is an interdisciplinary workshop that unites social science scholars. This two-day symposium aims to delve into the complexities of political...
Twinings Uses System Dynamics Games to Enhance HR Capability
“Realistic simulation is a powerful approach to building capability. The business simulation developed [by Dashboard Simulations and Lane4] gave [Twinings staff] an experience that called for them to develop and deploy competitive strateg[ies]. People learned a lot from the experience, and because [the experience] is their [own], the transfer to the workplace was easy. The same business simulation could be used over and over again with different groups within the company so the return on investment has been exceptionally good.”―Simon Brocket, International Human Resources Director, Twinings
The Goal
Twinings is a leading global brand in the hot beverages market and offers a range of premium teas and malt beverages. In an effort to enhance the services offered to business partners, Simon Brocket, International Human Resources Director at Twinings, challenged Ken Thompson, of Dashboard Simulations, and Austin Swain, of Lane4, to design a business game that would help Twinings Human Resources (HR) staff understand the challenges of operating a country level business unit. The training sessions would be run over the course of a single day, and thus the insights had to be communicated in an engaging, authentic, and succinct manner. With that in mind, Ken and Austin chose System Dynamics to the power the simulator.
The Challenges
Historically Twinings business units are confronted with several challenges. In a series of interviews and workshops Ken and Austin worked with Simon and other Twinings subject matter experts to document their mental models and identify the most important challenges. Seven were selected for the simulator:
- Price vs. demand
- Reacting to the market vs. bucking the market
- New customers vs. existing customers
- Value chain vs. organizational health
- Leading indicators vs. lagging indicators
- Your strategy vs the unexpected
- Me vs. us Working in an executive team
The Simulator
As business units address these challenges the decisions they make ultimately affect customer loyalty as measured by consumption. The System Dynamics model at the core of the simulator represents this using stocks and flows as shown in Figure 1 below:
Figure 1: Model overview
In this model, customers move from stock to stock via the blue flow arrows. As customers progress from left to right, they consume more products leading to higher revenues. At each stage consumers can also choose to leave, hence the goal of the game is to make decisions which:
- attract new customers, turn them into regular consumers and ultimately vocal fans
- prevent customers from moving to lower levels of consumption or switching to competing products altogether.
Diving In…
During the daylong session, HR staff were organized into groups representing country level business units. Twice during each simulated year, the teams were given the opportunity to review results and make decisions for the upcoming period. At the end of each year the business units would present their results, insights, and plans for the following year to a senior Twinings executive acting as Group CEO.
As the game progressed teams explored each of the seven challenges; identifying insights and highlighting new options and strategies. Here are a few of the challenges they experienced.
Leading Indicators vs. Lagging Indicators
As prior decisions played out in the model, several metrics were reported on the decision board shown in Figure 2 below.
Figure 2: Decision board
Leading non-financial indicators like growth rate and lagging financial resultswere identified and discussed. As a result, HR staff gained a personal understanding of the information country level business units have to assess progress and make decisions, and how those decisions can affect future results.
Your Strategy vs. the Unexpected
With the start of every round the facilitators would announce market updates such as “a key competitor has changed their prices,” or “There is a shortage of raw materials” and tweak the model accordingly. With this new information and the metrics from their individual decision boards the business units were then faced with the decision: “Do we keep to the original plan or adjust to the new market conditions?” Teams made their decisions independently and the simulation moved forward. As the results came in the teams learned if the decision was wise, they discussed insights and planned changes.
Me vs. Us ‐‐ Working in an Executive Team
Each business unit, as in the real world, was comprised of several members that formed an executive team for that region. Over the course of the daylong session, critical skills of leadership, communication, collaboration, and decision making under pressure were tested and improved and the concept of collective responsibility was deeply reinforced.
The Impact
To date, the game has been run for eighteen different groups at Twinings, with very positive feedback. Staff have come away with personal exposure to the challenges facing the business units they serve, resulting in strategies and insights to serve them better.
Do you want to know more?
- High performance leadership/decisions: business game research findings (May 2013)
- Contact modelers Ken Thompson, Eline De Jong
OTHER SUCCESSFUL APPLICATIONS
The World Bank Uses System Dynamics to Identify Root Causes of Poverty
The World Bank Uses System Dynamics to Identify Root Causes of Poverty EXECUTIVE Summary Madagascar has one of the highest poverty rates in the world. In 2022, an astonishingly three out of every four people in Madagascar lived below the poverty line. Poverty has...
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Upcoming Events

Polarization Workshop 2023
“Directions of Polarization, Social Norms, and Trust in Societies: perspectives from Behavioral Sciences” is an interdisciplinary workshop that unites social science scholars. This two-day symposium aims to delve into the complexities of political...
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Call for Presenters: Seminar Series
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Join us
OTHER SUCCESSFUL APPLICATIONS
The World Bank Uses System Dynamics to Identify Root Causes of Poverty
The World Bank Uses System Dynamics to Identify Root Causes of Poverty EXECUTIVE Summary Madagascar has one of the highest poverty rates in the world. In 2022, an astonishingly three out of every four people in Madagascar lived below the poverty line. Poverty has...
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System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute
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Call for Presenters: Seminar Series
Call for Presenters: Seminar Series We at the System Dynamics Society are continually seeking vibrant and knowledgeable presenters for our ongoing Seminar Series. As we unfold the calendar, there’s always a place for more insights, experiences, and expertise to enrich...
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference The International System Dynamics Conference brings together experts, practitioners, and students to exchange ideas, showcase real-world applications, and celebrate...
From Bergen to Global: UiB’s System Dynamics Group
From Bergen to Global: UiB’s System Dynamics Group The System Dynamics Group, an autonomous research group at the University of Bergen (UiB) was established in 1971 by professor emeritus Svein Nordbotten. Inspired by the work of Jay W. Forrester, Nordbotten...
Upcoming Events

Polarization Workshop 2023
“Directions of Polarization, Social Norms, and Trust in Societies: perspectives from Behavioral Sciences” is an interdisciplinary workshop that unites social science scholars. This two-day symposium aims to delve into the complexities of political...
RSC Uses System Dynamics to Increase HVACR Sales Against the Tide
“Using the proven Strategy Dynamic process focused our limited resources on organizing strategic issues, identifying the critical resources, and developing the insight to more rapidly create intuitive and actionable business strategy.”―Warren Farr, CEO, Refrigeration Sales Corporation
System Dynamic’s benefits do not have to be driven by outside consulting efforts. Sometimes, internal education and training lead to insights which cause a company to thrive and even evolve during the most tumultuous times. Take Refrigeration Sales Corp (RSC), during the downturn of the late 2000s. CEO-turned-modeler, Warren Farr, was able to see RSC’s revenue go up 25% in a market that saw sales go through a 25% decline, thanks to forecasts driven by SD modeling and insights gained during the process of developing those models.
RSC is a third generation privately owned family business located in Ohio, USA specializing in wholesale sales and support of Heating, Ventilation, AC and Refrigeration (HVACR) units. Over the years the company had expanded its business beyond just equipment sales to credit lending, technical support and training for many thousands of statewide contractors. At the time the HVACR industry itself had enjoyed three decades of continuous growth, and RSC had seen annual AC sales increases averaging 10%. But for the first time in years, these annual sales rates were decreasing. Competitors, and the company’s own customers, believed this to be a “temporary lull” caused by the economy as a whole and, along with more cautious suppliers, most parties were optimistic for the future. However, Warren, who had just taken the first of several courses in System Dynamics, believed that recent trends in 2001 signaled a new phase in the market’s development and that this historic growth would inevitably slow down more permanently.
Applying System Dynamics
Inspired by the notion of feedback stemming from inside the system rather than external causes, Warren applied the SD methodology to create long-term market forecasts; ones which were crucial to a company whose sales and profits were tied directly to the fortunes of market volume. Working off of the three views of the future in the figure below, Warren sought to find the underlying truth of the industry. While suppliers and customers were sticking with the “hope” prediction, and the company’s management was preparing for the “best guess”, information on the market’s installed base showed clearly that the “fear” scenario was in fact the appropriate response to prepare for.
A key systemic insight is this. The nature of durable goods, is that they are, well, durable.Sales levels for a durable product have the shape of a bell curve; sales of new units increase until the market becomes saturated, at which point new sales are mostly replacement or upgrades. Warren’s competitors and customers were blind to this basic truth, and fully expected demand to start rising again with the next recovery in the economy and in construction.
This saturation effect is simple enough to state – but how significant would it be, and over what time-scale would it play out? The dynamic model quantified the accumulation of the installed-base and internalized the feedback of declining first-time sales, allowing managers to observe reality playing out and refine their intuitions about the ebbs and flows of the industry’s growth cycle.
Not only was the approaching saturation point reducing the installation base for new AC units, but in a northern U.S. region like Ohio where an AC unit could last for 15 to 20 years, replacement sales were unlikely to fuel growth either. The model was predicting a 20% to 30% contraction in sustainable annual unit sales, which would be considered catastrophic in most markets.
U.S. Regulations Delay Market Contraction
The reaction to these insights was swift and not without controversy. In the years 2004 and 2005, sales spiked even higher than the hopeful prediction thanks to new US Dept. of Energy regulations which were causing contractors to stock up on older AC units before new minimum efficiency requirements took place and raised prices. But RSC stuck to its forecasting model. In an industry which had known nothing but growth for decades, RSC was downsizing its workforce, tightening customer credit limits and consolidating its inventory and warehouses. Both suppliers and customers thought these actions were short-sighted according to common industry logic and current record sales. But RSC’s uncommon logic would swiftly prove itself as the predicted market contraction came true. After 2005, sales entered an unprecedented crash, setting the market average back down to 1994 levels.
“The modeling provided a longer-term perspective, allowing RSC management to make these dramatic changes in company bandwidth over a period of about 3 years, avoiding the excess cost associated with rapid ‘cutting’.” ―Warren Farr, CEO, Refrigeration Sales Corporation
Forecasting Leads to Market Share Growth
Thanks to their SD forecasting efforts, RSC changes were proactive and planned, and not reactive with unintended consequences. Though RSC would have survived the industry downturn without modeling, the company was now in a prime position to diversify and take on new market share as competitors sought to shed expenses in a bid to stay afloat. New talents, territories, and market shares were taken from unprepared firms scrambling to adapt to the crash. In territories where the AC market saw a 30% contraction from 2000 to 2010, RSC saw a 25% increase in annual revenues and 30% increase in its sales locations.
RSC’s story highlights a number of points. First, managers need to regularly ‘step outside’ the day-to-day crush of business activity, and understand the fundamentals of what is happening in the market around them. Second, just being aware of principles – like market saturation – may not be enough. Often what is needed is modeling work to figure out the quantified, time-based consequences of these dynamics. Third, the company’s work highlights the advantage of making decisions with forethought and examination, rather than waiting for the impact of new market conditions to throw off business plans. The story reflects the simple but powerful insights that System Dynamics can bring to such questions. Clearly, RSC’s strategic change decision was very significant, enabling them to create new advantages over the competition.
Lastly, we can see that System Dynamics is not some highly technical tool only accessible to math whizzes, but a practical, accessible method that smart managers like CEO Warren Farr can learn to use to great effect.
OTHER SUCCESSFUL APPLICATIONS
The World Bank Uses System Dynamics to Identify Root Causes of Poverty
The World Bank Uses System Dynamics to Identify Root Causes of Poverty EXECUTIVE Summary Madagascar has one of the highest poverty rates in the world. In 2022, an astonishingly three out of every four people in Madagascar lived below the poverty line. Poverty has...
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Fast-Track Cities Uses System Dynamics to Enhance HIV Care EXECUTIVE Summary Low levels of viral suppression at 69% for people with HIV make it hard to believe the 95% target level will be achieved by 2030 in St. Louis, USA. As a solution, Fast-Track Cities-STL opted...
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute EXECUTIVE Summary The Portuguese Oncology Institute (IPO) faced a critical challenge in its intensive care unit (ICU) where doctors and nurses experienced high turnover due to tensions with...
Upcoming Events

Polarization Workshop 2023
“Directions of Polarization, Social Norms, and Trust in Societies: perspectives from Behavioral Sciences” is an interdisciplinary workshop that unites social science scholars. This two-day symposium aims to delve into the complexities of political...
Recent Posts
Call for Presenters: Seminar Series
Call for Presenters: Seminar Series We at the System Dynamics Society are continually seeking vibrant and knowledgeable presenters for our ongoing Seminar Series. As we unfold the calendar, there’s always a place for more insights, experiences, and expertise to enrich...
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference
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From Bergen to Global: UiB’s System Dynamics Group
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Join us
OTHER SUCCESSFUL APPLICATIONS
The World Bank Uses System Dynamics to Identify Root Causes of Poverty
The World Bank Uses System Dynamics to Identify Root Causes of Poverty EXECUTIVE Summary Madagascar has one of the highest poverty rates in the world. In 2022, an astonishingly three out of every four people in Madagascar lived below the poverty line. Poverty has...
Fast-Track Cities Uses System Dynamics to Enhance HIV Care
Fast-Track Cities Uses System Dynamics to Enhance HIV Care EXECUTIVE Summary Low levels of viral suppression at 69% for people with HIV make it hard to believe the 95% target level will be achieved by 2030 in St. Louis, USA. As a solution, Fast-Track Cities-STL opted...
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute EXECUTIVE Summary The Portuguese Oncology Institute (IPO) faced a critical challenge in its intensive care unit (ICU) where doctors and nurses experienced high turnover due to tensions with...
Recent Posts
Call for Presenters: Seminar Series
Call for Presenters: Seminar Series We at the System Dynamics Society are continually seeking vibrant and knowledgeable presenters for our ongoing Seminar Series. As we unfold the calendar, there’s always a place for more insights, experiences, and expertise to enrich...
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference The International System Dynamics Conference brings together experts, practitioners, and students to exchange ideas, showcase real-world applications, and celebrate...
From Bergen to Global: UiB’s System Dynamics Group
From Bergen to Global: UiB’s System Dynamics Group The System Dynamics Group, an autonomous research group at the University of Bergen (UiB) was established in 1971 by professor emeritus Svein Nordbotten. Inspired by the work of Jay W. Forrester, Nordbotten...
Upcoming Events

Polarization Workshop 2023
“Directions of Polarization, Social Norms, and Trust in Societies: perspectives from Behavioral Sciences” is an interdisciplinary workshop that unites social science scholars. This two-day symposium aims to delve into the complexities of political...
Achieving a Polio-Free World Through System Dynamics Simulation
EXECUTIVE Summary
This System Dynamics model underpinned a 192 country resolution to eradicate polio globally and led the Bill and Melinda Gates Foundation to give Rotary International $100 million to fund the polio eradication effort.
The model made a case for continued funding policy eradication by providing compelling evidence that polio outbreaks will cost more than continued intense vaccination. While the reduction in the incidence of cases was making it look like the cost of immunization was exceeding its benefits, this application of System Dynamics shows that dealing with ongoing, long-term sporadic outbreaks resulting from stopping or slowing down immunization programs is even more costly than dealing with sporadic outbreaks. The process resulted in a simulation model that estimates the costs of two alternative policies. Option 1 was to continue efforts to eradicate polio and option 2 was to reduce the immunization rate and deal with sporadic outbreaks.
This analysis came at a critical time. In February 2007, the WHO Director-General, Dr. Margaret Chan, convened an urgent stakeholder consultation to discuss the option of switching from eradication to control. Clearly showing the dynamics and giving the wavering commitment a name helped key stakeholders appreciate the options quantitatively and with a much longer time horizon. Since then, efforts have continued to focus on finding the resources needed for complete eradication and on dealing with the other complex challenges that remain. With the support of the simulation model, national and global health leaders and financial supporters re-committed to completing eradication, which led to several hundreds of millions of dollars of resources.
#Polio #WHO #Vaccination #Health
The Problem
Following the successful eradication of smallpox and impressive progress in the elimination of polio in the Americas, in 1988 the World Health Assembly committed to the global eradication of wild polioviruses by the year 2000. By 2000, the Global Polio Eradication Initiative (GPEI) had significantly reduced the global circulation of wild polioviruses. However, in 2002–3, faced with insufficient funding to continue intense vaccination everywhere, the GPEI focused its vaccination efforts. At the time, wild polioviruses continued to circulate in six countries, but many other countries remained vulnerable to importation. Political and logistical challenges led to outbreaks and exportations, and between 2004 and 2006 wild polioviruses appeared again in previously polio-free African and Asian countries.
Toward the end of 2005, a debate began about abandoning the goal of eradication. How could the world continue to justify the significant use of resources (both financial and human) on polio, particularly with the number of cases globally already so low and so many other disease control and health services programs in need of resources?
The Solution
The dynamic disease outbreak model represents a more complicated version of the standard SIR model used in a popular System Dynamics textbook (Sterman, 2000). However, in Polio, we must deal with different types of imperfect immunity (i.e., from historic or recent exposure to polioviruses – including the oral poliovirus vaccine and/or vaccination with the inactivated poliovirus vaccine – as well as a latent period and routine or supplemental immunization rates). Modifying and expanding our existing model allowed us to determine that it was not possible to “effectively control” (i.e., achieve low cases) at a low cost. This means that control either implies high costs and low cases, or low costs and high cases, but not low costs and low cases.

However, our most significant insight came from exploring the dynamics of the economic investment in eradication. After watching the GPEI deal with the reintroductions of wild polioviruses in previously polio-free countries between 2004 and 2006, we recognized that reducing vaccination led the stock of susceptible individuals to build up and ultimately to outbreaks after some delay. Responding to the outbreaks requires reinvesting in intensive vaccination, which after some delay contains the outbreak and reduces or eliminates the circulation of the virus. With success comes a perception that the high level of investment compared to the low incidence is no longer justified. If policymakers succumb to the resulting pressure to reduce vaccination spending, this creates a situation in which populations again become vulnerable to new outbreaks.
“If policymakers succumb to the resulting pressure to reduce vaccination spending, this creates a situation in which populations again become vulnerable to new outbreaks.”
To capture this behavior, we constructed the negative feedback loop shown here, which we called “wavering”. We incorporated this feedback loop into our dynamic disease model and tailored the model to two populous northern Indian states in which wild poliovirus still circulates. We explored two options: (1) vaccinate intensively until eradication; and (2) vaccinate intensively only if the costs per incident case remain below a certain acceptable level, but reduce the vaccination intensity otherwise (i.e., a “control” option with the possibility of wavering).


Outcomes
This application of System Dynamics highlights the systemic causes of overruns and emphasizes the importance of understanding the complex physical and social systems within which large projects operate. We, fortunately, saw the wavering commitment loop when no one else seemed to see it, and we went beyond just seeing the loop to build and use a model that provided answers to critical questions at the time the decision makers could use them (and needed them and asked us). In the presentation to the stakeholders, we showed the results to tell the dynamic story in the simplest possible way (i.e., by comparing a firm commitment to a wavering commitment showing the cumulative costs and cases).
We did not focus on explaining the model itself to attempt to walk the decision makers through the equations or diagrams. Instead, we focused on communicating the key insights based on what they already knew (e.g., the 2002–3 reduction in vaccination led to big outbreaks and high costs). However, we anticipated and received (as anticipated) some criticism from economists who did not recognize in the model a traditional health economic analysis, but these were relatively limited.
Do you want to know more?
- Using System Dynamics to Develop Policies That Matter: Global Management of Poliomyelitis and Beyond
- Economic analysis of the global polio eradication initiative
- Economic benefits of the global polio eradication initiative estimated at $40-50 billion
- Modeling Global: Policy for Managing Polioviruses: An Analytical Journey
- Eradication versus control for poliomyelitis: an economic analysis
OTHER SUCCESSFUL APPLICATIONS
The World Bank Uses System Dynamics to Identify Root Causes of Poverty
The World Bank Uses System Dynamics to Identify Root Causes of Poverty EXECUTIVE Summary Madagascar has one of the highest poverty rates in the world. In 2022, an astonishingly three out of every four people in Madagascar lived below the poverty line. Poverty has...
Fast-Track Cities Uses System Dynamics to Enhance HIV Care
Fast-Track Cities Uses System Dynamics to Enhance HIV Care EXECUTIVE Summary Low levels of viral suppression at 69% for people with HIV make it hard to believe the 95% target level will be achieved by 2030 in St. Louis, USA. As a solution, Fast-Track Cities-STL opted...
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute EXECUTIVE Summary The Portuguese Oncology Institute (IPO) faced a critical challenge in its intensive care unit (ICU) where doctors and nurses experienced high turnover due to tensions with...
Upcoming Events

Polarization Workshop 2023
“Directions of Polarization, Social Norms, and Trust in Societies: perspectives from Behavioral Sciences” is an interdisciplinary workshop that unites social science scholars. This two-day symposium aims to delve into the complexities of political...
Recent Posts
Call for Presenters: Seminar Series
Call for Presenters: Seminar Series We at the System Dynamics Society are continually seeking vibrant and knowledgeable presenters for our ongoing Seminar Series. As we unfold the calendar, there’s always a place for more insights, experiences, and expertise to enrich...
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference The International System Dynamics Conference brings together experts, practitioners, and students to exchange ideas, showcase real-world applications, and celebrate...
From Bergen to Global: UiB’s System Dynamics Group
From Bergen to Global: UiB’s System Dynamics Group The System Dynamics Group, an autonomous research group at the University of Bergen (UiB) was established in 1971 by professor emeritus Svein Nordbotten. Inspired by the work of Jay W. Forrester, Nordbotten...
Join us
OTHER SUCCESSFUL APPLICATIONS
The World Bank Uses System Dynamics to Identify Root Causes of Poverty
The World Bank Uses System Dynamics to Identify Root Causes of Poverty EXECUTIVE Summary Madagascar has one of the highest poverty rates in the world. In 2022, an astonishingly three out of every four people in Madagascar lived below the poverty line. Poverty has...
Fast-Track Cities Uses System Dynamics to Enhance HIV Care
Fast-Track Cities Uses System Dynamics to Enhance HIV Care EXECUTIVE Summary Low levels of viral suppression at 69% for people with HIV make it hard to believe the 95% target level will be achieved by 2030 in St. Louis, USA. As a solution, Fast-Track Cities-STL opted...
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute
System Dynamics Unravels ICU Tensions at the Portuguese Oncology Institute EXECUTIVE Summary The Portuguese Oncology Institute (IPO) faced a critical challenge in its intensive care unit (ICU) where doctors and nurses experienced high turnover due to tensions with...
Recent Posts
Call for Presenters: Seminar Series
Call for Presenters: Seminar Series We at the System Dynamics Society are continually seeking vibrant and knowledgeable presenters for our ongoing Seminar Series. As we unfold the calendar, there’s always a place for more insights, experiences, and expertise to enrich...
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference
Honoring Excellence: A Glimpse into the Awards of the International System Dynamics Conference The International System Dynamics Conference brings together experts, practitioners, and students to exchange ideas, showcase real-world applications, and celebrate...
From Bergen to Global: UiB’s System Dynamics Group
From Bergen to Global: UiB’s System Dynamics Group The System Dynamics Group, an autonomous research group at the University of Bergen (UiB) was established in 1971 by professor emeritus Svein Nordbotten. Inspired by the work of Jay W. Forrester, Nordbotten...
Upcoming Events

Polarization Workshop 2023
“Directions of Polarization, Social Norms, and Trust in Societies: perspectives from Behavioral Sciences” is an interdisciplinary workshop that unites social science scholars. This two-day symposium aims to delve into the complexities of political...
MasterCard Halts Market Share Slide With Scenario Planning
The Problem
MasterCard, a major credit card company, once held a dominant market position US Market Share with only one primary competitor, Visa. They woke up one day and realized that, after six years of steady decline in revenues and market share, they had lost their leadership position. The company was stymied. Everyone was blaming each other. The erosion continued despite every effort to turn things around. Conventional wisdom, based on past experience, was not working. It was pretty desperate, nobody knew what to do, and it was feared that they would be out of business in the next five years if they couldn’t turn the “death spiral” around. Despite multiple initiatives to slow or reverse the decline, nothing seemed to work. Our work began with a more limited focus, but soon our objective became finding a solution to reverse the market share decline. It became clear, given the changes in the marketplace, that a new way of understanding the forces at play was necessary.

The Solution
The company called in the System Dynamics group of PA consulting as part of a larger project to change the company’s fortunes. System Dynamics (SD) and PA consulting were chosen because of their ability to look at the problem in a whole new way: people within in the company were thwarting each other’s efforts, and a more holistic approach for the organization was necessary. SD provided the necessary perspective by looking at the system as a whole, without losing crucial details.
Among the early modeling insights, was a simple recognition of the perilous situation in which MasterCard found themselves. The fact was that the company’s clients, credit card issuers, tended to focus all of their marketing efforts on the market leader, while ignoring the runner-up. In this case, when Visa was king, clients only promoted Visa’s product to the detriment of MasterCard. This was a case of a common systems trap called “Success to the Successful” and, if left unchecked, would surely have led to the demise of the less successful entity, MasterCard.
MasterCard also learned that there was a limit on spending due to minimal payments. Customers would not use the cards to the full advantage if they were not being paid off. Counter-intuitively, the best observed solution for this problem was to create a higher minimum payment, to allow for increased monthly spending.

We designed, built and tested a model of the US credit card industry and market–the cardholders, the choices they made using different cards, the businesses that accepted the cards. The model simulated MasterCard performance and that of each of the main competitors-Visa, Amex, Discover.
We tested ideas that came from all parts of the organization, but none had a significant and lasting impact. At one point they told us, “Just go experiment and let us know what you can find that WILL make a difference.” After several analyses, we identified four factors that when COMBINED would have that significant, lasting market share benefit being sought. A few discussions quickly identified “co-branding” (though we didn’t know what to call it then) as a strategy that would “pull all 4 levers”. We just described it as partnering with consumer-facing companies.
The outcome
PA consulting worked to collect real world experience, expert interviews, quantitative and qualitative data, and cultural factors. The information was cross checked, and at first, client focused. But a unique benefit of SD is its ability to scale upwards to encompass the entire market and capture the inherent complexities within the system. This model was scalable and could be moved from department to department to test a wide variety of initiatives. Hundreds of factors could be tested within the model’s nonlinear and time delayed system, to find the true leverage points which would allow MasterCard to regain and improve their market share. Consequently it was discovered that efforts such as increased value added assurance and increased issuer preference held the most value while conventional solutions like increased advertising held little leverage. This led MasterCard to be the first to market with the technique called co-branding, a partnership between a credit card brand and company, which allowed them to regain 6 points of market share.
Co-branding revolutionized the industry. Today, if you have a credit card, it is likely co-branded–the GM MasterCard, the Target MasterCard… Co-branding had the advantage of being a win-win-win… a win for the consumers, as the “points” gained by consumers provided noticeable discounts on their purchases…a win for the co-branders, who achieved higher customer loyalty as a result…and a big win for MasterCard, gaining almost exactly the market share and the timing predicted by the modeling. They hit the ground running and it was years before Visa and others could mount a similar set of alliances.To the MasterCard member banks the increase was worth billions in relative market share. Since then, co-branded cards have taken off in the United States and have redefined profits within the industry.
For MasterCard, System Dynamics changed not only the way the company saw itself, its competitors and its products, but it also helped drive the creation of an entirely new product line. MasterCard was able to efficiently understand their strategic resources and move on to a new field of growth by recognizing the key leverage points within their own system, identified thanks to the work done by PA consulting.
“In the end, everyone took credit for the work.”―Sharon Els
Modelers | Kenneth Cooper, Sharon Els, Jim Lyneis, David Starr |
---|---|
The Official Website | For added information, or with any questions, see CooperSDNetwork.com, or contact Ken via email: Ken.Cooper@CooperSD.com |
MasterCard Case: Part 1
(Narrated by Ken Cooper) 9:47 minutes
MasterCard Case Part 2 – The Back Story
(Narrated by Ken Cooper) 3:07 minutes
System Dynamics XMILE Webinars
On November 19, 2013 David Starr from Cooper Human Systems, and Sharon Els from PA Consulting Group presented their work in a webinar hosted by Steve Adler from IBM, and Karim Chichakly from isee systems.
This webinar was the third in the Big Data, System Dynamics, and XMILE webinar series jointly sponsored by IBM, isee systems and the OASIS XMILE Technical Committee. The series was showcase exemplar applications of System Dynamics in the areas of environment, business, health care, and public policy. (Nov 2013)
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System Dynamics Helps Reduce Waiting Lines for NHS Patients
System Dynamics Real-World Examples and Case Studies
Need Help With a Complex Problem?
Looking for a Systems Consultant? Fill out this form and we will follow up with a call and, soon enough, the right person for the job. Meet our Executive Director, Rebecca Niles, to swiftly identify how to meet your needs. We can introduce Systems Thinking to your organization through renowned exercises like the Beer Game.
Nov 2021
by Vanessa Perez Perez
EXECUTIVE Summary
The impact of COVID-19 on the National Health Service (NHS) in England, led to growing record waiting lists, deterioration of patients and recovery of elective care became the number one priority.
Creative solutions were needed to tackle the elective recovery backlog, however, the health service in Norfolk and Waveney in the East of England were constrained by limited resources. System Dynamics allowed operational and clinical staff to test the impact of major interventions, aiding decisions for leaders in the system about where best to allocate resources and transform services to benefit patients and reduce waiting times.
The modelling exercise explored ways to address backlogs in the Musculoskeletal pathway with the aim of returning them to sustainable levels while providing good outcomes for patients. The insights provided by the model considered not only capacity restrictions but also the final outcomes for patients.
The model starts from the population and incidence of activity, and through the community (including GP referrals, diagnostics, community physiotherapy), before then moving through into secondary care. Moving into secondary care it covers first appointment, follow up, waiting lists, beds, and incorporates how trauma impacts on elective waiting lists while considering constraints in theatres capacity and community services.
#England #NHS #Health #Waiting lists #Musculoskeletal
The Problem
Integrated care systems (ICSs) are partnerships of organisations that come together to plan and deliver joined up health and care services, and to improve the lives of people who live and work in their area. Norfolk and Waveney Integrated Care System (ICS) in England had a number of challenges across the health system which comprises three acute hospitals, two community providers, and a mental health trust. Prior to COVID-19, elective care across Norfolk and Waveney ICS was already seeing increases in waiting lists and it was not meeting national standards with some patients waiting over 52 weeks for planned care. COVID-19 then saw the postponement of the elective care which further impacted the situation negatively, leading to one of the biggest cohorts of 104 week waits in England.
To tackle the challenges across the whole system, clinical and non-clinical colleagues came together with the support of NHS England and Whole Systems Partnership, to develop three System Dynamics models in Stella Architect starting with the Trauma and Orthopaedics speciality within the Musculoskeletal (MSK) pathway and then also models for the Dermatology and Eye Care pathways. The models were used to test different scenarios and identify how healthcare operational interventions designed to reduce the elective care backlog impact patients across the Norfolk & Waveney ICS system.
The Solution
For the MSK pathway model, a group of analysts across the system first engaged with clinical and operational colleagues in stakeholder workshops identifying the key issue, exploring what-if questions, and developing a high-level conceptualisation of the model.
The model was developed using a modular approach by building separate parts of it first and then bringing the various components together. A user interface was created to support operational colleagues to understand the outputs of the model and enable decision-making. Operational colleagues used the interface to interactively adjust variables such as expected demand and see impact projections on capacity and waiting lists.
The model was able to test the following ‘what if’ scenarios:
What if…
…we provided open access to early self-referral and self-management including advice on holistic/lifestyle choices to improve ultimate outcomes and minimize the impact of delays caused directly or indirectly by the COVID epidemic?
…we deployed a multi-disciplinary team Advanced Clinical Practitioners (ACP) to triage long-wait patients and fast track those in greatest need, possibly to other providers, facilitating this with integrated IT systems?
…we eliminated interruptions to the capacity and therefore flow along the elective pathway from trauma or unscheduled care requirements, i.e. protected capacity?

Once the high level model conceptualisation was agreed upon, a prototype model was developed by analysts across the system, who had begun to receive technical training in using the software. Analysts from across the system each took a different part of the system to model and once these were completed, the different parts were brought together to create the complete system model. The stock and flow diagram below shows main components in the model. Please note that the actual model is more complex than the one illustrated in the diagram.

The user interface was accessible through a link on the internet, which allowed password holders to use and run the model.
Outcomes
There were many significant benefits and impact for doing this work including enabling high quality operational decision making around the elective recovery. This work helped to develop cohesion within the ICS, improving working relationships between analysts, clinicians, and operational staff across all of the stakeholders in the region.
Here are some highlighted benefits and impact of creating a system model in Norfolk and Waveney:
> Different impacts of scenarios could be understood and visualised through the model
> End users are now testing their own what-if questions, and understanding how changes to parts of the pathway will impact other parts of the system
> An iterative process captured a multiplicity of voices with real life experiences of the service
> This project complemented existing quality improvement and elective recovery work happening in Norfolk and Waveney ICS
> Staff shifted from silo working to genuine system working
> More conversations are now happening about the harmonisations or pathways, the locations of diagnostic assessment centres and community hubs.
> This approach is empowering discussions with Integrated Care Boards at a system level
> Analysts are now equipped with technical skills in order to conduct system modelling
> Analysts have developed much closer relationships with clinicians.
learn more
Model
Please note that this is an example model, it is not validated and it does not contain genuine data – it should be used to understand what the tool looks like and should not be used operationally.
Connect with Vanessa Perez Perez
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GM Creates the Telematics Industry Using System Dynamics
The Official Website
onstar.com is the official website in which you can become a member, get familiar with the services and purchase a plan.
The Issue You Tackled
In 1997, General Motors (GM) assembled a project team to develop its OnStar telematics business. Telematics is the provision of communications services to cars, including crash notification, navigation, Internet access, and traffic information. OnStar is GM’s two-way vehicle communication system that provides a variety of services that enhance safety, security, entertainment, and productivity. At the time, GM faced fundamental strategic decisions with respect to OnStar. The default and safe strategy was to market OnStar as a car feature that would improve vehicle safety and security. An alternate strategy was to view OnStar as a service business that could contribute greatly to GM’s profits.

What You Actually Did
GM formed a project team to consider alternative strategies for OnStar. GM makes important strategic decisions through the dialogue decision process, in which the project team interacts with the decision board that is responsible for actually making the decision and committing resources. Dynamic modeling can be a part of this process.
In this case, application of modeling was difficult. In the vehicle business, GM has decades of experience and plentiful historical data. Modelers can build on a wealth of previous analyses and examples of best practice. The OnStar business was very different in that the telematics market did not exist. To cope with the inherent uncertainty, we needed a modeling process that would allow integration of various methods and data sources. A simulation model was our core tool in the OnStar strategy project. The final model had six key sectors: customer acquisition, customer choice, alliances, customer service, finances, and dealer behavior.
In late 1997, the project team recommended a very aggressive strategy that included installation on all GM vehicles, recruitment of other manufacturers into the OnStar system, making the first year of service free and aggressively pursuing alliances with content partners.
The Results
Through 2001, the implementation of the OnStar business strategy has progressed very much as expected. The project contributed to creating a new enterprise mental model for GM, in which the transactions revenue is augmented with a stream of revenue from service businesses like OnStar. The OnStar project also created the new telematics business which did not exist before GM implemented its strategy. Today, Wall Street analysts project that the industry will grow to $12 billion over the next 10 years. By far, OnStar’s most important contribution is saving lives. OnStar answers thousands of emergency calls each month and has often made the difference between life and death.
Name | The General Motors OnStar Project |
---|---|
Modelers | Vince Barabba, Chet Huber, Fred Cooke, Nick Pudar, Jim Smith, Mark Paich |
Client | General Motors |
Client Type | Corporation |
Do you want to know more?
Publications
A multimethod approach for creating new business models: the General Motors OnStar project | Download |
Did You Know?
System Dynamics Application Award
The System Dynamics Applications Award is presented by the Society every other year for the best “real world” application of system dynamics. In 2007, the Society awarded its first Applications Award to Vince Barabba, Chet Huber, Fred Cooke, Nick Pudar, Jim Smith, and Mark Paich for their work A Multimethod Approach for Creating New Business Models: The General Motors OnStar Project.
To see the citation that was made by James Lyneis at the conference, please follow this link. (Jul 2007)
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