SIMULATION MODELING


Have you ever wished that you could try out a new idea in your organization—without risking the entire business? Simulation modeling, a powerful systems thinking tool, lets you do just that. To build a model, you can use one of the several software packages developed by companies like isee systems or Ventana Systems, you can work with a consultant who is well versed in these tools.

When you work with software or a consultant to build a model, you define the variables (things that change over time) that are important in the problem you're trying to address. You then clarify your assumptions about how those variables affect one another, and assign mathematical equations to reflect those relationships (for example, "Let's assume that every dollar invested in marketing will generate two dollars worth of sales"). Once you've assigned these equations, you can plug in various changes, run the simulation, and see what outcome your changes might generate!

Even if you don't actually get to the point of building and using a simulation model, the mere process of defining variables, clarifying assumptions about their interrelationships, and expressing those relationships in mathematical equations is valuable. Why? Because it forces you and your team to think carefully about the problem at hand. And by working through your problem with that kind of discipline, you'll be much more likely to arrive at an effective, enduring solution.

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