A powerful approach to strategy and business management
Much of what we need to manage is just plain complicated, with many things depending
on each other, long delays between actions and outcomes, different parts of the situation
run by different people, and so on. So it’s no surprise it can be hard to know what’s best
to do – and spreadsheets, tables and charts are little help because we can’t see what’s causing what.
Luckily, there’s a way to see through these complications. You’ve probably seen pictures of
control panels people use to manage rail or power networks, oil refineries and so on, and even
smaller examples like an aircraft pilot’s displays. These work because you can see how all the
pieces are connected, what state key parts of the system are in, and how the things you push and
pull are linked into the system you control.
That’s what our diagrams and models do for business – or for any part of it, or for any other kind
of organization. How complicated the picture or model needs to be depends on the size and complexity
you need to tackle. You can often get great understanding from simple, small pictures – we have
even cracked some big issues on a table napkin! Just an accurate diagram of what causes what,
with a few key numbers explaining how things are changing.
You can go much further if you need to – bigger diagrams with more numbers on a white-board for
bigger issues, working simulation models to test alternatives, living ‘control panels’ that give
you and your team way more mastery over performance than balanced scorecards ever can. And it
all works because the underlying principles capture rigorously key features of how the real
world works.
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