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Harnessing Intangible Business Factors with Dynamic Business Models

In the session “Harnessing Intangible Business Factors with Dynamic Business Models,” part of the “System Dynamics for Business Innovation” series led by Kim Warren, the conversation centered on how intangible assets like reputation, skills, data, and quality affect—and are affected by—the development of a business system and its performance. Here are the key takeaways from the session:

  1. Understanding Intangible Factors: Intangible factors such as reputation, skills, and data play crucial roles in business systems. Warren stated, “Intangible factors are not just qualitative; they can and should be quantified.”
  2. Specifying and Quantifying Intangibles: Participants learned methods to specify, quantify, and simulate intangible factors within dynamic business models (DBMs). Warren shared, “Dynamic business models can reliably incorporate intangible elements, allowing for better strategic decisions.”
  3. Leveraging Intangible Assets: Strategies to harness intangible assets for business growth and sustainability were discussed. “Understanding and managing intangibles can lead to significant improvements in business performance,” Warren noted.

Warren classified intangible factors into three main categories: State of Mind (e.g., reputation, motivation), Information-based (e.g., data, procedures), and Quality-related (e.g., product quality). Each category plays a crucial role in the overall dynamics of business systems, impacting everything from customer loyalty to operational efficiency.

State of mind intangibles influence behaviors such as customer loyalty and staff productivity. As Warren illustrated, “State of mind drives behavior, which in turn impacts business performance.” Information-based intangibles, including customer data and procedural knowledge, are vital for improving operational efficiency and customer satisfaction. Accurate and comprehensive information helps businesses operate smoothly and meet customer needs effectively. Additionally, improving product or service quality over time enhances reputation and fosters customer loyalty. Conversely, negative qualities, like software bugs, need to be minimized to avoid damaging the business’s reputation and customer trust.

Watch the full webinar recording below. It provides in-depth insights into the development, functionality, and applications of leveraging intangible business factors with dynamic business models, showcasing its potential to improve business strategy and operations.

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How to Build Intangibles into Your Dynamic Business Models

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Modelling Intangible Factors + Modeling Essentials

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    About the Speaker

    Kim Warren is an experienced strategy professional, teacher, and publisher of online courses and teaching resources on business modeling – fast becoming a mainstream capability for executives, consultants, and business students. He was awarded the Jay Wright Forrester Award by the International System Dynamics Society in 2005 and was the Society’s President in 2013.

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    How Did En-ROADS Get 755,000 users? Lessons on Modeling, Interface Design, and Facilitation

    How Did En-ROADS Get 755,000 users? Lessons on Modeling, Interface Design, and Facilitation

    Achieving widespread engagement is a significant challenge with a System Dynamics model. Yet, En-ROADS, the climate solutions simulator co-developed by Climate Interactive and MIT Sloan, has captivated hundreds of thousands of users globally. In this webinar led by Andrew Jones, John Sterman, and Florian Kapmeier, the team shared how their commitment to System Dynamics modeling principles, innovative interface design, and thoughtful facilitation created a global movement. The lessons learned are relevant for all System Dynamics modelers seeking to make a greater impact in their fields.

    1. Modeling: Build Trust and Ensure Accuracy

    “You have to have a rigorous, evidence-based model that is fully documented and tested every which way.” John Sterman

    En-ROADS’ impact is built on a robust modeling foundation that adheres to rigorous standards of transparency and continuous testing. John Sterman underscores the importance of rigorous validation: “You have to have a rigorous, evidence-based model that is fully documented and tested every which way,” he states, highlighting the necessity for clear, accessible documentation that allows users to understand and trust the model’s operations.

    The En-ROADS team enhances model reliability by calibrating past model behavior against historical data (by, e.g. Lazard, the IEA, etc.) and comparing future model behavior against the behavior of climate models used by the Intergovernmental Panel on Climate Change (IPCC), identifying discrepancies not only to prove correctness, but also to pinpoint areas needing improvement. Andrew Jones elaborates on this process: “We compare the model against historical data to understand where the discrepancies are and how we can improve. It’s not about proving the model’s correctness but about identifying areas for growth and improvement.”

    For System Dynamics modelers looking to build confidence in the model, these practices are essential. Providing full transparency through comprehensive documentation and continuously validating models against industry benchmarks are crucial steps in establishing credibility. By adhering to these principles, modelers can ensure their models are technically robust and able to support decision-making.

    2. Interface Design: Guide Users to Key Insights

    “We designed the interface to lead a user to discover our modelers’ top insights without support.” Andrew Jones

    En-ROADS’ interface is designed to ensure users reach key insights intuitively. Andrew emphasized the goal: “We designed the interface to lead a user to discover our modelers’ top insights without support.” The interface offers both a beginner mode for quick understanding and an advanced mode for users with more technical skills, providing detailed charts and additional assumptions. Dynamic visuals and animations transform static data into a narrative, making complex concepts accessible and engaging.

    Within a few minutes exploring the En-ROADS interface, new users quickly grasp three critical insights:

    1.  “It’s still possible” – to bend the emissions curve and reduce average temperature increase.
    2. “There’s no silver bullet”, highlighting that no single solution can solve the climate crisis.
    3.  “Many solutions together”, emphasizing that combining multiple climate solutions is necessary to mitigate the climate crisis.

    An interface designed around key insights helps users understand complexity. The ease of engaging with a new innovation—trialability—is crucial for initial adoption and fostering word of mouth. Yet, negative experiences can lead to adverse feedback, potentially stifling the adoption and diffusion of the model. Sterman emphasized: “if people try something and have a bad experience, they will generate unfavorable word of mouth that can squelch the adoption and diffusion of your model.”

    John Sterman emphasizes the consequences of neglecting interface quality: “Suppose you have the world’s greatest model, but a terrible interface. Nobody learns anything, nothing will change, and you and everyone have wasted precious time and resources. That’s a failure mode.”  But he warns, “The opposite, though, is far more dangerous: a great interface with an underlying model that lacks integrity and hasn’t been carefully tested means you’re helping people learn things that are wrong and possibly downright harmful far more effectively than ever before.”

    By focusing on intuitive design and rigorous validation, En-ROADS ensures that the simulation is insightful and reliable for understanding possible climate solutions. This strategy serves as a reference for those aiming at making their models both informative and influential. As a System Dynamics Modeler, which 2-3 key takeaways would you like users to learn from your model?

    3. Facilitation: Create a Safe Space for Learning

    Make sure that you create a safe room where participants can share and challenge their mental models to allow them to engage deeply and learn together.” – Florian Kapmeier

    Facilitation is critical to En-ROADS’ global impact. Through experiences like the interactive En-ROADS Climate Workshop and the roleplaying game Climate Action Simulation Game, Climate Interactive effectively conveys the insights of the model by fostering environments that encourage deep learning and reflection. Florian Kapmeier emphasized the importance of these settings: “Make sure that you create a safe room where participants can share and challenge their mental models to allow them to engage deeply and learn together.” This approach allows participants to openly test their assumptions and understand the underlying dynamics of climate change.

    Florian, referred to Andrew’s Top 10 Tips to Engage People with a System Dynamics Model,  highlighting one key aspect: By asking participants  to mentally the likely impact of a climate solution on the temperature before running a scenario in En-ROADS, participants reveal their existing mental models and learn more effectively by comparing their understanding with model results. “Learning happens when the theory of thinking is laid out and people have to make a choice.”

    The commitment to creating a secure and open space for dialogue is foundational to the success of the engagements with En-ROADS. This facilitation strategy enhances the participants’ ability to understand complex concepts, and encourages them to apply these insights in practical and impactful ways. By ensuring that each session serves as a safe space for exploration and challenge, Climate Interactive fosters an environment where transformative learning and genuine understanding can occur.

    Climate Action Simulation for IKEA, Australia

    Community & Policy Engagement

    Community building has been fundamental to extend En-ROADS’ reach globally. Thousands have completed the Mastering En-ROADS training program, which empowers facilitators to engage diverse audiences. The En-ROADS Climate Ambassador program further nurtures hundreds of facilitators who provide En-ROADS Workshops and Climate Action Simulations worldwide, ensuring a unified network of like-minded advocates. This well-structured support system ensures that these facilitators are equipped to spread their knowledge effectively, fostering a collaborative and impactful community.

    In addition to training and support, Climate Interactive’s team emphasized the importance of engaging with policy makers, adapting communication to meet where they are in terms of climate change understanding. Presenting complex model data in an accessible manner is crucial for meaningful engagement. This strategy ensures that decision-makers receive information and are equipped to act on it.

    The Power of System Dynamics

    “System Dynamics is the most powerful way to engage other people in ways to improve system performance.” – John Sterman

    The success of En-ROADS hinges on a commitment to the core principles of System Dynamics, paired with innovative interface design and effective facilitation strategies. This approach has educated a global audience on climate solutions and empowered them to act. John Sterman, reflecting on the broader implications, asserts, “System dynamics is the most powerful way to engage other people in ways to improve system performance”, underscoring the potential of System Dynamics to facilitate meaningful discussions and drive change across various domains.

    Sterman reminded the audience that the discipline’s strength lies in its ability to convey complexity in a way that decision-makers can understand and act upon: “System Dynamics modelers need to invite people into the conversation, to join the collective effort and improve system performance together.” This collaborative spirit is reflected in the global network of facilitators, policymakers, and climate advocates brought together by En-ROADS.

    As System Dynamics modelers, the challenge is to not only build robust models but also to design engaging interfaces, facilitate participatory workshops, and nurture a community of like-minded advocates. By doing so, modelers can extend their influence beyond their field and create meaningful change in the world.

    Watch the recording below

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    Solving Bottlenecks in Dairy Production Facilities with System Dynamics

    EXECUTIVE Summary

    • FrieslandCampina faced potential bottlenecks in production due to the merging of two factories. They hired SD&Co which employed system dynamics simulation models to predict and manage these issues effectively, ensuring smooth operational integration.

    • The project led to strategic changes, such as optimizing algorithms for pallet selection and adding a conveyor belt system, thereby enhancing efficiency without the need for extensive physical expansion of facilities.

    • The implemented changes have prepared FrieslandCampina to handle increased production volumes and maintain efficiency even in scenarios of partial factory downtime, demonstrating a successful adaptation to the merger’s demands.

    #FriedslandCampina #SD&Co #Diary #Netherlands

    The Problem

    FrieslandCampina, a Dutch cooperative, specializes in transforming milk from dairy farmers into a wide array of dairy products. They were undertaking a significant project: merging two of their production facilities. This merger was anticipated to introduce new challenges, particularly in the filling and palletizing stages, as well as in the operations of their fully automated warehouse. The project was handled by SD&Co and their primary goal was to foresee potential bottlenecks under various post-merger production scenarios. Identifying these potential bottlenecks was crucial to ensure a smooth transition and maintain efficiency. Additionally, SD&Co was tasked with devising strategies to address these bottlenecks in the most effective and efficient manner possible, keeping in mind the operational workflow and the increased scale of production due to the merger.

    Figure 1 – FrieslandCampina’s production facility

    The Solution

    FrieslandCampina faced a significant challenge: implementing changes to their factory could take up to two years. This long time frame posed a risk of reduced production output or the possibility of overinvesting in capacity expansion. The complexity of the situation was heightened by the interconnected nature of the factory and warehouse processes, which made it challenging to accurately predict outcomes using traditional tools like spreadsheets.

    To navigate these complexities, SD&Co employed a comprehensive approach by developing four distinct simulation models. Each model varied in scope and level of detail, enabling a thorough analysis of a wide range of production scenarios and potential physical modifications to both the factory and the warehouse. These simulations were instrumental in testing the effects of various changes and understanding their impact on the overall operations.

    Thanks to these sophisticated simulation models, FrieslandCampina and its suppliers were able to pinpoint the most effective and efficient solutions. They could identify adjustments to the factory and warehouse that would best accommodate the increased volumes resulting from the merger of the factories. This strategic approach allowed for a well-informed decision-making process, ensuring that the adjustments made were optimally aligned with the new operational requirements.

    Figure 2 – Examples of sectors of the system dynamics model developed by SD&Co.

    Figure 3 – Overview of simulation dashboards.

    Outcomes

    In this pivotal project, SD&Co identified the most efficient modifications necessary for the factory and warehouse to handle the increased volumes post-merger. FrieslandCampina, in collaboration with its suppliers, is actively implementing these recommended changes. The key deliverables of this project were the innovative simulation models and a comprehensive presentation detailing the recommended changes. These system dynamics tools provided valuable insights, leading to strategic adjustments within the operational framework of FrieslandCampina. 

    One significant change was the refinement of the algorithm that manages the selection of pallets for outbound elevators. This adjustment negated the need for physical expansion of the outbound elevators and staging lanes, thereby optimizing existing resources.

    Additionally, they introduced a small conveyor belt behind two palletizers to avoid the need for a more extensive and costly redesign of the internal transport system around the palletizers.

    Based on the simulation, FrieslandCampina also made a strategic decision to refrain from further investments.  The model demonstrated that the new capacity would be adequate across a variety of production scenarios. This included scenarios where parts of the factory might temporarily break down or require maintenance. The project’s outcomes have significantly contributed to the robustness and efficiency of FrieslandCampina’s operations. The implemented changes ensured that the factory and warehouse can smoothly handle increased volumes, while providing a buffer for unforeseen production challenges. 

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    Leveraging Dynamic Business Models for Enterprise Architecture

    In the session Leveraging Dynamic Business Models for Enterprise Architecture, part of the System Dynamics for Business Innovation series led by Kim Warren, the conversation centered on enriching Enterprise Architectures (EAs) through the integration of quantitative Dynamic Business Models (DBMs). This approach significantly amplifies the efficacy and reliability of IT strategies and planning.

    Course

    Dynamic Business Modelling

    How to build powerful living models of plans or issues in half the time of using spreadsheets

    Key Insights:

    1. Foundation of Enterprise Architectures (EAs):
      • EAs provide a structural blueprint for IT strategy development, focusing on the organization’s processes and how these support its operational goals.
      • The webinar highlighted the importance of understanding these frameworks for implementing effective IT systems aligned with business objectives.
    2. Role of Dynamic Business Models (DBMs):
      • DBMs contribute to a more robust EA by introducing quantitative analyses that validate and enhance the traditionally qualitative aspects of EA.
      • By modeling business dynamics quantitatively, DBMs facilitate more accurate IT system alignment with strategic business goals, improving resource allocation and change management.
    3. Synergies between EAs and DBMs:
      • The webinar illustrated how DBMs strengthen EAs by providing a rigorous analytical foundation that accelerates and refines the architecture building process.
      • These models help predict the impact of IT strategies on business performance, making implementation more effective.
    4. Applications and Validation:
      • DBMs offer a structured approach to testing and validating IT strategies before full-scale implementation, ensuring that IT plans are both effective and aligned with overarching business strategies.
      • The session underscored the utility of DBMs in real-world applications, demonstrating their capacity to support complex decision-making across diverse business domains.
    5. Impact on IT Strategy and System Planning:
      • Incorporating DBMs into EA efforts leads to more informed decision-making, with enhanced insights into the interactions between various business functions and IT systems.
      • This integrated approach supports a proactive stance in IT strategy formulation, emphasizing continuous adaptation and alignment with business changes.

    The webinar was particularly relevant for IT professionals, systems architects, business analysts, and strategic managers. It also offered critical insights for academics and students in business and technology disciplines.

    Watch the recording below

    Whoops, this recording is available for members and ticket purchasers only. Please login to verify. If you’re not a member, purchase a membership here. You can also buy a ticket to watch the recording here

    About the Speaker

    Kim Warren is an experienced strategy professional, teacher, and publisher of online courses and teaching resources on business modeling – fast becoming a mainstream capability for executives, consultants, and business students. He was awarded the Jay Wright Forrester Award by the International System Dynamics Society in 2005 and was the Society’s President in 2013.

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    Cancer Prevention and Control with System Dynamics

    The webinar titled “Cancer Prevention and Control with System Dynamics” presented a systematic review focused on the use of System Dynamics modeling in the field of cancer research. The main objective was to evaluate how this methodology is applied across various studies to address complex issues in cancer prevention and control, including treatments, risk assessments, and intervention strategies.

    System Dynamics Modeling for Cancer Prevention and Control: A Systematic Review

    Key insights from the webinar included:

    1. Application of System Dynamics: The review detailed how both simulation models and causal-loop diagrams are utilized to study the dynamics of cancer-related issues, ranging from chemotherapy effectiveness to the impacts of environmental contaminants on cancer risks.
    2. Quality Assessment: The studies were assessed for quality based on criteria like clarity of objectives, adequacy of information sources, and the involvement of stakeholders. This highlighted a need for more rigorous standards in modeling to enhance reliability and applicability.
    3. Focus Areas and Interventions: The research covered diverse topics such as the effectiveness of cancer treatments, prevention through behavioral changes, and early detection techniques. It also underscored the importance of System Dynamics in modeling interventions like tobacco use reduction and vaccination strategies.
    4. Recommendations for Improvement: The presentation stressed the necessity for greater transparency and rigor in System Dynamics studies within cancer research. It called for the development of supportive infrastructures and best practices to foster multidisciplinary collaborations.

    The presenters, Erin Kenzie and Wayne Wakeland, through their extensive backgrounds in systems science and health policy, emphasized the potential of System Dynamics to offer comprehensive insights and effective solutions in cancer prevention and control.

    For those interested in exploring innovative methodologies and their practical applications in addressing complex health issues, watching the recording of this webinar is highly recommended. It promises valuable learnings in System Dynamics and its significant role in advancing cancer research.

    Watch the recording below

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    PRESENTERS

    Erin Kenzie is an Assistant Professor at the OHSU-PSU School of Public Health at Oregon Health and Science University in Portland, Oregon and holds faculty roles at the Portland State University System Science Program and the Oregon Rural Practice-based Research Network. She received her PhD in Systems Science from PSU in 2021. Dr. Kenzie’s research spans system dynamics, implementation science, and public health. She has been involved in research applying System Dynamics to colorectal cancer screening, behavioral health system capacity, unhealthy alcohol use screening and treatment, rural Veteran access to care, health plan-clinic partnerships, behavioral health integration, traumatic brain injury recovery, and climate change mitigation behavior.

    Wayne Wakeland is Professor Emeritus of Systems Science at Portland State University. He also served as the Systems Science Program Chair for many years. He earned a B.S. and a Master of Engineering at Harvey Mudd College (1973); and a Ph.D. in Systems Science at Portland State U. (1977). He developed and taught courses on computer simulation methods and more recently a course on system sustainability and organizational resilience. His research focused on the use of computational models for studying a variety of topics, including complications during human pregnancy, recovery from concussion, and policies to reduce opioid drug diversion, abuse, and overdose deaths. Other topics included environmental/ecological sustainability and elevated intracranial pressure due to traumatic brain injusy. He has been active in the System Dynamics Society for many years and helps lead its Health Policy Special Interest Group.

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    New Member Orientation and Networking April 2024

    Member Orientation

    The System Dynamics Society has recently hosted a New Member Orientation aimed at introducing new participants in the community. The session, led by SDS President, Allyson Beall King, and Director of Outreach, Meagan Colvin, provided an overview of the Society’s structure, mission, and opportunities for member involvement. The agenda included an introduction to the Society’s objectives, its staff, and the myriad of resources it offers.

    Highlights from the Orientation

    Introduction to Staff and Structure: The session provided detailed information on the organizational structure of the Society, introducing key personnel and their roles within the Society, from various locations around the globe.

    Member Resources and Benefits: The orientation highlighted several benefits for members, such as:

    • Discount on conference registration fee
    • Free access to all seminars and recordings
    • Reduced prices and some free courses for online learning.
    • Free access to the System Dynamics Review.
    • Membership in various Special Interest Groups (SIG) and Chapters with networking opportunities.

    Interactive Sessions: The event included a question-and-answer segment where participants engaged directly with leaders, enhancing the interactive nature of the orientation.

    Networking Opportunities: There was a special segment for networking, where Chapter and SIG leaders introduced themselves and shared insights into their activities, promoting community interaction among members.

    The New Member Orientation underscored the System Dynamics Society’s commitment to providing valuable resources and fostering a collaborative environment. It emphasized the Society’s dedication to tackling significant global issues through System Dynamics.

    For those interested in a deeper understanding of the membership benefits and to hear firsthand from Society leaders, we encourage watching the recording of the event. This will provide prospective and current members with a comprehensive view of the opportunities available within the System Dynamics Society.

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    A Design Value Calculator: A System Dynamics Boardgame

    EXECUTIVE Summary

    • Product design is a specific form of complex innovation that touches all areas of an organization’s management. While entrepreneurs recognise the value of design, they often tend to focus on areas that customers recognise as important but that they are often already happy with. Helping entrepreneurs to systemically assess the benefits of spending on developing different aspects of the user experience is, hence, fundamental to increase the return over investment and to improve business sustainability.

    • To address this, the CzechInvest Agency developed an interactive board game powered by a System Dynamics model simulator that simulates the economic development of a company over six years and calculates the profitability of changes made to the product design.

    • Based on the game results, the Agency presents opportunities to improve product design. The company’s management can thus objectively identify weaknesses and chooses a strategy to design a better product that improves profits.

    #CzechInvest #ProductDesign #Innovation #CzechRepublic

    The Problem

    Entrepreneurs face a multitude of challenges when it comes to product design, ranging from understanding user needs to navigating technical constraints. One of the primary hurdles is identifying and addressing the true pain points of their target audience. Without a deep understanding of user behavior, preferences, and expectations, entrepreneurs risk developing products that fail to resonate with their intended market.

    Additionally, entrepreneurs often fail to understand the concept of product design focusing too much on a particular aspect of their product (often the way it looks) neglecting other aspects of it. While the product presentation is important it is only one part of product design and entrepreneurs need to have a holistic view of the product balancing user-centric design with technical feasibility and cost considerations. In short, entrepreneurs need to ensure that their product ideas are not only desirable but also manufacturable and economically feasible.

    The Solution

    The solution developed consists of a board game and a complementary System Dynamics model. The game covers five areas of innovation that players can decide to invest on, and the simulation model is used to estimate the performance of these investments. The five areas of innovation players can select by placing a card on the boardgame are: i) services (Služby) ii) Marketing methods, iii) Customer Relationships (Vztahy se zákazníky), iv) Goods and products (Zboží), and v) Internal Company Processes (Procesy).

    Once the player has selected an area, the performance of the players decision is estimated using a System Dynamics model designed for this purpose. The figure shows an overview of the building blocks of the System Dynamics model and their links. A customer segment is a group of people or organizations that a company wants to attract and create value for through an appropriate value proposition. The larger the customer segment, the more customer relationships to manage and the busier the distribution channels. Every sale means billing, and billing is a source of revenue. Higher revenue means higher PROFIT for the company, thus growing key resources, one of which is the bank account. The more money in the bank account, the better it is to buy assets, hire new employees, increase product production capacity, and expand the distribution network.

    The Design Value Algorithm (DVA) coefficient enters the model in the Customer Segment building block (see figure of the Stock and Flow diagram) and thus influences all other elements in the model. The input of the DVA coefficient to the Customer Segment can also be verified in the Business Algorithms in the Dynamic Business Model illustration.

    The winner of the game can be determined either:
    a)    by the evolution of PROFIT’s cumulative profit with other players.
    b)    by looking at the impact of the design improvements made during the game.

    Outcomes

    CzechInvest clients implemented this solution and offers structured interviews to company management. The game demonstrates a systemic link between the concepts of design and user experience and quickly reveals the best strategy for further investment in product design.

    Below there are some examples and comments from one of the customers that played the game:

    Client Number 1X – XYZ Ltd:  “The measured value of design is the difference between the evolution of the PROFIT indicator that the company generates without investing in design (the blue curve in the graph) and the evolution of the profit that the company generates based on the decision to invest in design (the other three curves). The value of design is a dynamic indicator that changes over time.”

    Interpretation for the client 1X – XYZ Ltd: “The company needs to invest in design; in this situation, where its average UX is 66%, it is profitable. “

    According to the parameters given: the average UX (User Experience) = 0.66. This means that the company can still increase user experience by 34%. However, the manager did not make a strategic decision to earn more on design. Instead, he chose a strategy that is not in line with the company’s potential to increase UX. He placed investments in improving the functionality of the product first and investments in distribution third. In doing so, he identified the lowest UX sub-value in sales. If he wants to serve his customers better, he needs to strategically address sales first.

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    Visit the Design Value Calculator or connect with Eva Svirakova.

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    Society Governance Updates Welcome, Allyson! New President Allyson Beall King joined the Policy Council as our 2024 President. Her primary role is as director of the Washington State University School of the Environment, which focuses on regional ecologies and our...

    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...

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    OTHER SUCCESSFUL APPLICATIONS

    A Design Value Calculator: A System Dynamics Boardgame

    A Design Value Calculator: A System Dynamics Boardgame EXECUTIVE Summary Product design is a specific form of complex innovation that touches all areas of an organization’s management. While entrepreneurs recognise the value of design, they often tend to focus...

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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...

    Upcoming Events

    Dynamic Business Models for Dealing with Competition

    In the latest webinar of the System Dynamics for Business Innovation special series, Kim Warren delved into Dynamic Business Models for Dealing with Competition. This session, rich in practical advice and strategic insights, is pivotal for professionals seeking to sharpen their competitive edge. Here’s a breakdown of the webinar’s key points.

    Key Takeaways from the Webinar:

    1. Understanding Competitive Dynamics: The session focused on the use of dynamic business models to navigate competitive business environments. Warren highlighted the importance of understanding how competition plays out in real-time and the impacts on prices, marketing spending, and profits.
    2. Case Studies and Applications: Warren used two illustrative case studies to demonstrate the practical application of these models. He discussed GSK’s travel vaccines business and its response to a new competitor, and Beyond Meat’s strategy in creating a market for non-meat products. Both cases highlighted the strategic challenges and responses in dynamic competitive environments.
    3. Types of Competition: Warren outlined three standard competition mechanisms, covering most competitive scenarios. These include racing to capture new potential customers, maintaining existing customers while attracting competitors’ customers, and handling situations where customers can switch between suppliers.
    4. Practical Strategy Development: The session also touched upon practical aspects of strategic planning, like leveraging dynamic models for both long-term strategy and short-term operational decision-making.

    Invitation for Further Learning

    This webinar is a must-watch for those interested in refining their competitive strategies and understanding the application of dynamic business models. Viewing the recording will provide a deeper insight into the discussed concepts.

    Furthermore, the series will continue to offer rich content on strategic business areas such as IT systems architecture and environmental impact reporting. These upcoming sessions represent a unique opportunity to gain advanced knowledge and skills in the field.

    Join us for the upcoming webinars to deepen your understanding of dynamic business models and their critical role in shaping successful competitive strategies

    Certificate

    Attendees who participate in at least 6 out of the 9 webinars in the series will be eligible to receive a certificate titled “Introduction to Dynamic Business Models.” This is an opportunity to gain recognition of your learning in this innovative field. For those who cannot attend live sessions, recordings will be available, allowing you to review the material and complete the series at your convenience.

    Watch the recording to get your certificate code.

    Watch the recording below

    Whoops, this recording is available for members and ticket purchasers only. Please login to verify. If you’re not a member, purchase a membership here. You can also buy a ticket to watch the recording here

    About the Speaker

    Kim Warren is an experienced strategy professional, teacher, and publisher of online courses and teaching resources on business modeling – fast becoming a mainstream capability for executives, consultants, and business students. He was awarded the Jay Wright Forrester Award by the International System Dynamics Society in 2005 and was the Society’s President in 2013.

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    Society Governance Updates

    Society Governance Updates Welcome, Allyson! New President Allyson Beall King joined the Policy Council as our 2024 President. Her primary role is as director of the Washington State University School of the Environment, which focuses on regional ecologies and our...

    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...

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    A Design Value Calculator: A System Dynamics Boardgame

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    Escape from Model Land – How Mathematical Models Can Lead Us Astray and What We Can Do About it

    In the third episode of MINDS CAST, we had the privilege of engaging with Erica Thompson, the author of “Escape from Model Land” This session delved into the intricacies of using mathematical models in decision-making, highlighting both the potential benefits and the pitfalls of relying heavily on these models. Here, we summarize the key insights from this enlightening discussion, including Thompson’s perspectives on the role of models in understanding complex issues and the importance of critical engagement with these tools.

    About the Presenter:

    Dr. Erica Thompson, Associate Professor of Modelling for Decision Making at UCL’s Department of Science, Technology, Engineering, and Public Policy, brings a wealth of expertise to the topic. Her research focuses on the application of mathematical and computational models in decision-making, with a particular emphasis on developing techniques for assessing and interpreting models. As a Fellow of the London Mathematical Laboratory and a Visiting Senior Fellow at the LSE Data Science Institute, her work also delves into the philosophical aspects of model outputs and their integration with expert judgment in decision-making processes.

    Webinar Overview:

    1. The Essence of Models in Decision-Making: Thompson opened the discussion by exploring the role of mathematical models in aiding our understanding of complex issues like economic regulation, climate change, and pandemics. She emphasized that while models are crucial tools, they do not produce perfect predictions of the future.
    2. Challenges in Mathematical and Social Contexts: The conversation highlighted the mathematical and social challenges in using models for decision-making. Drawing on examples from climate change and COVID-19, Thompson underscored the importance of recognizing the limitations and assumptions underlying these models.
    3. Best Practices for Responsible Modeling: The session also touched upon best practices for responsible modeling, especially in politically charged contexts. Thompson stressed the need for transparency, accountability, and the acknowledgment of value judgments embedded within models.
    4. Navigating Model Land: The concept of ‘Model Land’ – a metaphorical space where models exist in their idealized form – was a key focus. Thompson discussed the risks of becoming overly reliant on models and strategies for effectively navigating out of Model Land while still leveraging the benefits they offer.

    Key Points from the Discussion:

    • Model Diversity and Assumption Transparency: Thompson advocated for the diversity of models and perspectives in modeling processes. She emphasized the need for models to make their assumptions and biases explicit, allowing for more critical engagement and evaluation of their outputs.
    • The Role of Experts in Modeling: The discussion also addressed the evolving concept of expertise in modeling. Thompson highlighted the importance of involving a range of experts in the modeling process to ensure diverse perspectives and assumptions are considered.
    • Models as Conviction Narratives: Thompson described models as ‘conviction narratives,’ tools that provide a structured way of thinking about the future. She stressed the importance of understanding models as narratives that require translation and interpretation to be effectively used in decision-making.
    • Future of Modeling: Looking ahead, Thompson envisioned a modeling landscape that is more integrally connected with social and political contexts. She called for models that are transparent about their value judgments and capable of incorporating diverse perspectives to enhance trust and utility in decision-making.

    Erica Thompson’s insights in the MINDS CAST episode provide a valuable perspective on the complexities of mathematical modeling. Her emphasis on critical engagement, diversity of perspectives, and the need for transparency in modeling practices offers a roadmap for navigating the challenges and potentials of models in decision-making. As we continue to rely on models to understand and shape our world, Thompson’s call for a more nuanced and responsible approach to modeling is both timely and essential.

    Watch the recording below

    About the Speaker

    Dr. Erica Thompson holds the position of Associate Professor of Modelling for Decision Making at UCL’s Department of Science, Technology, Engineering and Public Policy, where I work on a programme of research funded by a UKRI Future Leaders Fellowship. She is also a Fellow of the London Mathematical Laboratory, where she leads the research programme on Inference from Models, and a Visiting Senior Fellow at the LSE Data Science Institute.

    Her research focuses on leveraging mathematical and computational models to guide decision-making in practical contexts. Dr. Thompson has dedicated her efforts to developing mathematical and statistical techniques for assessing and interpreting models. Additionally, she explores essential philosophical inquiries concerning the true significance of model outputs and the integration of models with expert judgement in decision-making processes.

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    Call for Presenters: Seminar Series

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    A Design Value Calculator: A System Dynamics Boardgame

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    Join us

    Dynamic Business Models for Strategic Management Accounting

    In the first session of the System Dynamics for Business Innovation special series, led by business strategist and academic Kim Warren, attendees gained valuable insights into the use of dynamic business models in strategic management accounting. This blog provides an overview of the key topics covered in the webinar ti

    Key Points from the Webinar:

    1. Role of Strategic Management Accounting (SMA): SMA is essential for helping accountants and leaders in developing and monitoring their business strategies. It requires detailed analysis of business data, forecasting, and preparing forward-looking reports.

    2. Responding to Market Changes: Strategic Management involves reacting to unexpected competitive threats and market shifts. This includes strategies such as acquiring companies or entering new markets.

    3. Use of Financial and Non-Financial Data: Strategic management requires ongoing analysis and interpretation of both financial and non-financial data. This encompasses aspects like capacity factors and their connections within the business.

    4. Tools for SMA: SMA uses a combination of financial and non-financial tools. The Balanced Scorecard, for example, connects financial outcomes with operational activities and customer focus.

    5. Customer Focus in Business Success: Understanding customer needs is important for business success. Tools like the value curve and the business model canvas help align business offerings with customer needs and set apart from competitors.

    6. Budgeting Techniques: The webinar discussed traditional and zero-based budgeting, underlining the need for budgeting approaches that suit current business requirements.

    7. Tools for Predictive Analysis: It’s important to have tools that can forecast business outcomes in various scenarios. These tools should consider factors such as revenue, competitor behavior, and strategic objectives.

    8. Case Study Application: The webinar demonstrated these concepts through a case study of a new table service restaurant, focusing on sales and profit growth projections.

    Invitation for Further Learning:

    For those interested in deepening their understanding of Strategic Management Accounting, we recommend watching the recording of this webinar. Further, participation in the upcoming sessions of this series will offer expanded knowledge on topics like competitive strategy, IT systems, and the impact of business decisions on society and the environment.

    Join us to further explore the field of Strategic Management Accounting and apply these principles to enhance your business strategies.

    Certificate

    Attendees who participate in at least 6 out of the 9 webinars in the series will be eligible to receive a certificate titled “Introduction to Dynamic Business Models.” This is an opportunity to gain recognition of your learning in this innovative field. For those who cannot attend live sessions, recordings will be available, allowing you to review the material and complete the series at your convenience.

    Watch the recording to get your certificate code.

    Watch the recording below

    Whoops, this recording is available for members and ticket purchasers only. Please login to verify. If you’re not a member, purchase a membership here. You can also buy a ticket to watch the recording here

    About the Speaker

    Kim Warren is an experienced strategy professional, teacher, and publisher of online courses and teaching resources on business modeling – fast becoming a mainstream capability for executives, consultants, and business students. He was awarded the Jay Wright Forrester Award by the International System Dynamics Society in 2005 and was the Society’s President in 2013.

    Resoures: 

    Demo Model

    Recent Posts

    Society Governance Updates

    Society Governance Updates Welcome, Allyson! New President Allyson Beall King joined the Policy Council as our 2024 President. Her primary role is as director of the Washington State University School of the Environment, which focuses on regional ecologies and our...

    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...

    Upcoming Events

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    A Design Value Calculator: A System Dynamics Boardgame

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    Join us