CoSc4151 Systems Simulation and Modeling

2) Peter Senges Five Disciplines

2.1 Personal Mastery

Personal mastery is the term used to describe the discipline of

personal growth and learning.

People who possess high degrees of personal mastery are continually

increasing their abilities to create the results they seek.

Their never-ending quests for self-improvement and self-discovery

underlie the spirit of the learning organization.

Personal mastery includes spiritual growth and approaching life as a

creative work.
It means that we continually clarify what is important to us and

continually learn how to see the real world more clearly.

People who possess a high degree of personal mastery share some
basic traits:
First, they have a strong sense of purpose that supports their

personal visions and goals.

Second, they are individuals who work with change, not against

it.
Third, they feel connected to others and to life itself. And
perhaps most importantly, they live in a continual learning

mode.
Systems thinking bring out the more subtle aspects of personal
mastery, for example,
combining reason and intuition,
seeing the interconnectedness of events in the world,
compassion,
and commitment to the whole.

To embark on a journey of personal growth means that one has made a

conscious choice.
It is impossible to force an individual to engage in personal growth.
As Senge says, It is guaranteed to backfire.
There is a key lesson here for managers: you cant push against a
string.
o People must want to do change.
o Managers help create the environment, which includes
modelling the desired behaviors.
o Senge explains that managers must work daily at creating
a climate that promotes personal mastery.
o They must, above all, establish an environment in which
people feel safe to
create their personal visions,
where they can challenge the status quo,
and where inquiry and commitment to the truth are

the norm.
If managers live this on a daily basis, personal mastery will be
strengthened in two major ways.
First, it will reinforce the notion that personal growth is indeed

truly valued in the organization.

Second, it will provide a sort of on-the-job-training, an essential

part of personal mastery.

The manager who is serious about her own quest for personal growth will
send a powerful message to her followers.
Personal mastery is seen as one of the two individual disciplines.
The other one is mental models.
However, its important to remember that the five disciplines are
interrelated.
In the case of mental 5 models, they are also intertwined with systems
thinking because they deal with how we view the world.

2.2 Mental Models

Each of us carries our own sets of assumptions, views, and prejudices

that affect how we interact with others.

And while we often attempt to deny certain views or prejudices we
hold, its difficult to maintain this stance when our actions are not

consistent with our words.

Chris Argyris explains: Although people do not always behave
congruently with their espoused theories (what they say), they do

behave congruently with their theories-in-use (their mental models).

Our mental models strongly affect what we do because they affect

what we see.
As Albert Einstein put it: Our theories determine what we measure.
From a management perspective, mental models are extremely
important because of the associated consequences, whether good or

bad.
In fact, it is difficult, to develop systems thinking if ones mental

models are ingrained in past experiences and beliefs.

For example, how can a manager deal effectively

with

an

interpersonal problem in his unit if he has certain opinions about an

individual?
How can a manager bring her followers on board with a major change
in the organization if she is unwilling to understand the underlying

causes for the change and the many interdependencies involved?

To be an effective systems thinker requires the discipline of mental

models. These two disciplines fit together naturally.

Systems thinking concentrate on how to modify assumptions in order

to show the true causes of problems.

Mental models, in contrast, look at revealing our hidden assumptions.

For managers, it becomes essential that they take the time to reflect
on their existing mental models until their assumptions and beliefs are

brought out into the open.

Until then, their mental models will not change and it is pointless to
attempt to engage in systems thinking.

2.3 Shared Vision

When we talk about shared vision, we dont mean an idea. Instead,

were referring to a force that is in peoples hearts.

Senge states: When people truly share a vision they are connected,
bound together by a common aspiration. Personal visions derive their

power from an individuals deep caring for the vision.

Shared vision is an essential component of a learning organization

because it provides the focus and energy for learning.

The underlying force is the desire by people to create and accomplish
something. And the bedrock, as Senge calls it, for developing shared

visions is personal mastery.

Shared vision emerge from personal visions, and this is how energy is

formed and commitment created.

Managers must therefore walk a fine line when they express their own

visions.
To master the discipline of building shared vision requires that
managers understand that visions are not announced from the top or

that they come from strategic planning processes.

The traditional approach to creating a vision for the organization has
largely failed in most organizations because employees have been
unable to connect with the vision developed by management.

In other words, the vision that is communicated to employees has not

built on peoples personal visions.

They are not enrolled in the vision.
The consequence has typically been apathy and a lack of energy on

the part of people.

Of course visions can, and indeed should, be conceived by senior

managers.
But senior management must realize that their vision cannot be

considered shared until others in the organization feel part of it.

Their personal visions must connect with the larger vision.
Building shared vision requires daily effort by managers.
It must be a central part of their work. And they must remember that

the visions they develop are still their personal visions.

As Senge asserts: Just because they occupy a position of leadership
does not mean that their personal visions are automatically the

organizations vision.
Creating shared vision goes hand-in-hand with systems thinking.
The latter enables people to understand what and how

organization has created.

Vision portrays what people want to create.
Because most managers dont experience that they are contributing to

the

their current reality, they have great difficulty in seeing how they can

contribute to changing it.

They see their problems as being caused by the system or by external

factors.
This attitude, as Senge explains, ...can be elusive to pin down
because in many organizations the belief We cannot create our own

future is so threatening that it can never be acknowledged.

To be a good manager (or leader) means that you are in charge of
your own future.

A manager (or non-manager for that matter) who openly questions the
organizations ability to accomplish what it is attempting is quickly

labeled as being not on board or as rocking the boat.

The underlying cause for this occurrence is that organizations tend to

be dominated by linear thinkers instead of systems thinkers.

This leads us to the final discipline: team learning.
As well see, team learning is all about alignment and getting people
working in synch with one another. And this is where creating shared
vision can be a powerful force.

2.4 Team Learning

Team learning builds on the discipline of personal mastery.

It is a process that encompasses aligning and developing the capacity

of a team to achieve the goals that its members truly want.

While individual learning at one level is important, it is irrelevant at

another level.
Individuals may learn but the organization as a whole does not.
There is no organizational learning. Teams become, therefore, the
essential ingredient for learning, a microcosm for learning as Senge

calls it.
There are three key components of team learning.
1. Teams must probe and explore complex issues, drawing on the
talents, knowledge, and experiences of one another.
2. They must work in concert, coordinating their efforts and
communicating openly and closely. Trust is essential since members
must be able to rely on one another.

3. Teams must interact with each other so that they can share what
they learn. Senge invented the expression Nested Teams as a way to
express this interaction.

Just as there must be interdependency within a team, so too must

there be interdependency among teams in an organization.

Team learning must therefore be seen as being a collective discipline.
To say that I as an individual am mastering team learning is

irrelevant.
Team learning involves mastering the two primary ways that teams

communicate: dialogue and discussion.

By dialogue, Senge means deep listening and the free exploration of

ideas. (Stephen Covey uses the expression emphatic listening).

Discussion, on the other hand, refers to searching for the best view to

support decisions once all views have all been presented.

For a team to grow and develop, and to be effective, its necessary

that conflict be present.

This notion may no doubt surprise some people, but unless a teams

members disagree at times, the team will not learn.

To think creatively, there must be the free flow of conflicting ideas.
Of course, the team must know how to use disagreements

productively.
Conflict becomes then a part of the continuing dialogue among the

teams members.
As Senge explains: ...the difference between great teams and
mediocre teams lies in how they face conflict and deal with the

defensiveness that invariably surrounds conflict.

The issue of when and how to use conflict productively is one that
escapes most organizations.

The consequence is the regular use of defensive routines.

To admit that one doesnt know the answer to a question or problem is

to reveal ones supposed incompetence.

This has particular applications to managers because theyre expected

to know everything that is going on in the organization.

This becomes part of managers mental models.
Senge states: Those that reach senior positions are masters at
appearing to know what is going on, and those intent on reaching
such positions learn early on to develop an air of confident

knowledge.
When managers internalize this mental model, they create two
problems.
o First, to maintain the belief that they have the answers they
must shut themselves off from inquiry from their subordinates.
They refuse to consider alternative views, especially if they
appear provocative.
o The second problem they create for themselves is that they
sustain their ignorance. To keep up the facade they become very
skilled at being defensive. After all, they wish to be seen as

being effective decision makers.

Through his work, Chris Argyris has found that such defensive

behavior becomes an ingrained part of an organizations culture.

As he states: ...We are the carriers of defensive routines, and
organizations are the hosts. Once organizations have been infected,

they too become carriers.

Organizational learning is obviously severely impeded in such a
culture.

This is underscored especially when teams engage in defensive

routines, which block their energy and prevent them from working

towards their shared visions.

The more that defensive routines take root in a team, and more

broadly the organization, the more they hide the underlying problems.
And in turn, the less effectively these problems are addressed, the

worse the problems become.

As Argyris puts it: ...defensive routines are self-sealing they

obscure their own existence.

All is not lost, however. A team that is committed to the truth will find

ways to expose and address its defensiveness.

The same applies to a manager who has the courage to self-disclose
and examine his mental models to determine where defensiveness

may be hidden.
This in turn creates energy and the willingness to explore new ideas.
Openness and dialogue then become the norm in the organization.

2.5 Systems Thinking

Systems thinking deals with seeing wholes, or what some would say

the big picture.

Its a discipline that enables us to see interrelationships and patterns

of change, as opposed to snapshots of situations.

It helps us to determine cause and effect, an important point because

it is never influenced in just one direction.

An important element of systems thinking is that of feedback and the

role it plays in cause and effect.

There are two types of feedback processes:
o Reinforcing

An example of reinforcing feedback is a manager who

does not fully appreciate the impact her expectations have
on an employees performance. If she believes that the
employee has potential, she will give him extra attention.
In contrast, if she believes that an employee will be a poor
performer, he will receive less attention. This type of
behavior by a manager produces a self-fulfilling prophecy.
In the first example, the employee will grow and develop,
while in the second he will languish. In the latter example,
a downward spiral can actually begin, one in which the
interaction between the manager and the employee
deteriorates, the consequence of mutual diminishing

expectations.
o balancing
The second type of feedback is balancing. These processes
abound in organizations and are difficult to address. For
example, we are all familiar with the heroes who work
long hours. They often complain about having to work on
weekends. And it is often these people who advance in the
organization because working long hours is considered a
virtue and an informal requirement to advancement. Some
organizations have attempted to eliminate this practice
using formal communication. However, what they have
found is that despite the official line from the CEO and

other senior managers, the informal rule is that working

long hours is still valued. Staff see management doing it,
so it must be right. When managers attempt to implement
a change, they often find themselves caught in a balancing

process.
They are surprised to discover resistance by staff. Managers must
therefore model what it is theyre advocating. In the case of
discouraging staff from working long hours, managers must practice

what they are preaching.

As Senge states: Whenever there is resistance to change, you can

count on there being one or more hidden balancing processes.

The challenge facing managers is to be able to identify the source of

the resistance and to focus on these norms and power relationships.

Pushing harder against the resistance is futile because it only

strengthens it further.
In a true learning organization, managers come to understand the
need to see the whole and the interrelationships that make an

organization what it is.

They are then functioning as systems thinkers.
Senge sees systems thinking as an art, in which the individual is able

to see through complex issues to the underlying forces.

Mastering systems thinking means ...seeing patterns where others

only see events and forces to react to.

Seeing the forest as well as the trees is a fundamental problem that

plagues all firms.

Senge speaks of what he calls The Primacy of the Whole.
This refers to the concept that relationships are more fundamental
than things, and that wholes are of a higher order than parts.

Managers are conditioned to see their organizations as ... things

rather than as patterns of interaction.

They look for solutions that will fix problems, instead of searching

out the underlying causes.

The consequence is the ... endless spiral of superficial quick fixes,
worsening difficulties in the long run and an ever-deepening sense of

powerlessness.
While organizations learn through their people, this does not
guarantee that organizational learning will result. This takes us to
Senges second discipline

3) Why Systems Thinking-the Fifth Discipline?

3.1 WHAT IS SYSTEMS THINKING?

Systems thinking offers us a powerful new perspective, a specialized

language, and a set of tools that one can use to address the most

stubborn problems in his everyday life and work.

A system thinking is a way of understanding reality that emphasizes
the relationships among a system's parts, rather than the parts

themselves.
Based on a field of study known as system dynamics, systems thinking
have a practical value that rests on a solid theoretical foundation.

3.2 Why Is Systems Thinking Important?

Why is a system thinking valuable?
Because it can help us design smart, enduring solutions to problems.
In its simplest sense, system thinking gives you a more accurate
picture of reality, so that you can work with a system's natural forces
in order to achieve the results you desire.
It also encourages you to think about problems and solutions with an
eye toward the long viewfor example, how might a particular
solution you're considering play out over the long run? And what
unintended consequences might it have?
Finally, systems thinking is founded on some basic, universal
principles that you will begin to detect in all arenas of life once you
learn to recognize them.
What Are Systems?

What exactly is a system? A system is a group of interacting,

interrelated, and interdependent components that form a complex
and unified whole. Systems are everywherefor example, the R&D
department in your organization, the circulatory system in your body,
the predator/prey relationships in nature, the ignition system in your

car, and so on.

Ecological systems and human social systems are living systems;
human-made systems such as cars and washing machines are
nonliving systems.

Most systems thinkers focus their attention on living systems,

especially human social systems.

However, many systems thinkers are also interested in how human
social systems affect the larger ecological systems in our planet.

Systems have several defining characteristics:

Every system has a purpose within a larger system. Example: The
purpose of the R&D department in your organization is to generate
new product ideas and features for the organization.
All of a system's parts must be present for the system to carry out
its purpose optimally. Example: The R&D system in your organization
consists of people, equipment, and processes. If you removed any one
of these components, this system could no longer function.
A system's parts must be arranged in a specific way for the system
to carry out its purpose. Example: If you rearranged the reporting
relationships in your R&D department so that the head of newproduct development reported to the entry-level lab technician, the
department would likely have trouble carrying out its purpose.
Systems change in response to feedback. The word feedback plays a
central role in systems thinking. Feedback is information that returns
to its original transmitter such that it influences that transmitter's
subsequent actions. Example: Suppose you turn too sharply while
driving your car around a curve. Visual cues (you see a mailbox

rushing toward you) would tell you that you were turning too sharply.
These cues constitute feedback that prompts you to change what
you're doing (jerk the steering wheel in the other direction somewhat)
so you can put your car back on course.
Systems maintain their stability by making adjustments based on
feedback. Example: Your body temperature generally hovers around
98.6

degrees

Fahrenheit.

If

you

get

too

hot,

your

body

produces0020sweat, which cools you back down.

It is the discipline that integrates the disciplines, fusing them into a
coherent body of theory and practice. It keeps them from being
separate gimmicks or the latest organization change fads. Without a
systemic orientation, there is no motivation to look at how the
disciplines interrelate. By enhancing each of the other disciplines, it
continually reminds us that the whole can exceed the sum of its parts.

For example, vision without systems thinking ends up painting lovely

pictures of the future with no deep understanding of the forces that

must be mastered to move from here to there.

This is one of the reasons why many firms that have jumped on the
"vision bandwagon" in recent years have found that lofty vision alone

fails to turn around a firm's fortunes.

Without systems thinking, the seed of vision falls on harsh soil.

If non systemic thinking predominates, the first condition for

nurturing vision is not met: a genuine belief that we can make our

vision real in the future.

We may say "We can achieve our vision" (most American managers
are conditioned to this belief), but our tacit view of current reality as a

set of conditions created by somebody else betrays us.

But systems thinking also needs the disciplines of building shared
vision, mental models, team learning, and personal mastery to realize

its potential.
Building shared vision fosters a commitment to the long term.
Mental models focus on the openness needed to unearth shortcomings
in our present ways of seeing the world. Team learning develops the
skills of groups of people to look for the larger picture that lies

beyond individual perspectives.

And personal mastery fosters the personal motivation to continually

learn how our actions affect our world.

Without personal mastery, people are so steeped in the reactive
mindset ("someone/something else is creating my problems") that

they are deeply threatened by the systems perspective.

Lastly, systems thinking makes understandable the subtlest aspect of
the

learning

organizationthe

new

way

individuals

perceive

themselves and their world.

At the heart of a learning organization is a shift of mindfrom seeing
ourselves as separate from the world to connected to the world, from
seeing problems as caused by someone or something "out there" to
seeing how our own actions create the problems we experience.

A learning organization is a place where people are continually

discovering how they create their reality. And how they can change it.
As Archimedes has said, "Give me a lever long enough . . . and singlehanded I can move the world."

4) Relation to knowledge Management and Data Warehousing

A Data Warehouse can serve as a storage medium for keeping the

corporate memory, or at least concerning certain types of data.

It helps gaining new knowledge by delivering well integrated data to
analysis tools, e.g. On-Line Analytical Processing or Knowledge
Discovery in Databases, and thus becomes an important part of

Decision Support Systems or Executive Information Systems.

In this way a Data Warehouse, storing only data, results in growth of

knowledge and may lead to enhance the enterprise's success.

One key term when discussing knowledge management became the

"Corporate Memory" or "Organizational Memory".

This memory serves for storing the enterprise knowledge which has

to be managed.
Analogous to the

diverse

approaches

summoned

together

as

knowledge management the corporate memory also contains several

kinds of information, e.g. know-how in the heads of employees; caseknowledge, such as lessons learned; atomic, raw, or low level data,
such as lists of customers, suppliers, or products, which are stored in
data bases; or several documents stored as natural language texts in
files define

corporate

memory

as

"an

enterprise-internal

application-independent information and assistant system [which ...]

stores large amounts of data, information, and knowledge from

different sources of an enterprise."
The Data Warehouse

"A Data Warehouse is a subject-oriented, integrated, time-variant, and

nonvolatile collection of data in support of management's decisionmaking process."

All detailed data can be aggregated under several criteria to yield

lightly summarized data.

These summaries can further be aggregated to yield highly

summarized data, etc. E.g. daily sales could be stored at the detailed
level (i.e. one snapshot of sales data is taken each day), the lightly
summarized data represents weekly and the highly summarized data
represents monthly aggregation

Besides

raw

and

aggregated

data

DWh

contains

metadata

describing its contents, the sources of data, and the transformation

procedures converting raw data into aggregated data or source data
into integrated, cleansed data.

Metadata also serves as a navigation aid for the DWh-users, i.e. the
data analysts.

The analysts will consult metadata when planning data analyses.

The DWh has been defined as a "collection of data" with the goal to
support "decision making processes.

Data Warehouse and Knowledge Management

A DWh could serve as one main component in a knowledge

management system.

The data contained in a DWh represents a large part of a company's

knowledge,

e.g. the

company's

clients

and their

demographic

attributes.

The DWh represents an enterprise wide data collection, which is

central and defines a common basis for several enterprise units
accessing it.

From

the stored

data

new knowledge can be derived using

technologies such as On-Line Analytical Processing (OLAP) or

Knowledge Discovery in Databases (KDD).

Data analyses may consist of several reporting and visualisation

mechanisms of the data, presented on different levels of aggregation,
from different angles (i.e. dimensions), and using different graphical
types of diagrams.

These reporting facilities can be exploited interactively using OLAPtechnology

Another way of gaining knowledge out of the DWh's data are

algorithms provided by Knowledge Discovery in Databases (KDD).

These mostly mathematical and statistical methods are able to detect

knowledge previously unknown to the owners of the data

KDD is defined as follows:

"Knowledge Discovery in Databases (KDD) is the non-trivial process of
identifying valid, novel, potentially useful, and ultimately
understandable patterns in data."

These technologies --KDD and OLAP-- represent core mechanisms

exploited within Decision Support Systems (DSS) or Management and
Executive Information Systems (MIS, EIS).

It is through these systems, that managements decisions are based

on assured, enterprise wide, real data.

5) Casual loop diagramming

A causal loop diagram (CLD) explains the behavior of a system by

showing a collection of connected nodes and the feedback

loops created by the connections.

One or more of the nodes represent the symptoms of the problem.
The rest of the nodes are the causal chains causing the problem.
A CLD consists of nodes, arrows, and feedback loops.

The nodes on this one are truth ratings, detected deception, false

attacks, false promises, and so on.

A node has a name and a value and represents something in the real
world.
What matters is not the exact value, but the value relative to what it
was earlier or in relation to other nodes.

There are two types of arrows for showing how one node influences another.
A solid arrow is adirect relationship, where the value of node A varies
directly with the value of node B.

A dashed arrow indicates an inverse relationship, whereas the value of A

goes up the value of B goes down.
There are two types of feedback loops: reinforcing and balancing.
o In a reinforcing feedback loop a change in a node goes around the
loop to cause a change in that same node in thesame direction, which

causes the loop to grow or decline.

In
a balancing
feedback

loop the

change

is

in

the opposite direction, which causes the loop to balance its behavior
as it seeks a goal of some kind.

6) Stock-and-flow Diagrams

The best way to construct a model is to start with the stocks, add the

flows and then use converters to explain the flows.

A single stock represents the size of the population.
The flows are represented by double lines which depict the flow of
material in and out of the stock.

We use the stocks to represent the present state of the system and
flows to represent the actions that change the state over time.

It will take some time for the flows to have their effect on the stocks,

so the stocks tend to change more slowly over time.

For example, suppose births and deaths were to suddenly go to zero
for a month. The population at the end of the month would be the

same as at the start of the month.

The only way a stock (population) may be changed is by the action of
the flows (action of births and deaths)

In the above population model it uses three stocks to keep track of the
young, mature and elderly people.

The flows are clear to us because we are familiar with births, deaths,
maturation and aging. This model also calculates the total population,
but not as a stock

Why Start with the Stocks?

The stocks are the best place to start because they are the most easily

recognized variables in the system.

Each stock should be assigned a well understood name (i.e. leaves on

ground) and a well understood unit of measure (i.e. pounds).

The flows represent the change in the stocks over time, and their
units of measure are determined once we select a measure of time.