More and more we see in our consulting practice clients having trouble dealing with complex business issues. This is a result not only because of technical complexity but is also caused by organizational complexity. Technical complexity means that a large number of various factors have impact on the problem, factors which may be influencing each other and among which the interrelations often are unclear. Organizational complexity can originate from the situation where a number of decision-makers with various backgrounds on the short term have to come to agreement on these complex relations where they may have a conflict of interests.
In these situations we often use a consultancy method which is called Participative Business Modelling. This group model building method has proved to be very useful to enhance the process of learning in two ways: in clarifying content related issues in complex situations (reducing technical complexity) and by enhancing client commitment by using a highly participative approach (dealing with organizational complexity). This is achieved in Participative Business Modelling projects by using a combination of process facilitation techniques and System Dynamics modelling techniques.
In this paper we describe a succesful project
with one of our clients in which we used the Participative Businesss
Every organization now and then faces strategical issues. Issues which used to be solved by the ìlonelyî manager at the top of the organization. Nowadays however teams of managers usually address these issues, because:
However adressing problems in teams often introduces a number of problems:
All these factors can contribute to a process
where team members are more trying to ìwinî discussions
then to learn from each other. In this way the process of effective
strategic decision making can be highly frustrated. To enhance
learning in the team a process of decision making is required
in which mental models are communicated, tested and changed in
such a way that a shared definition of the problem results. System
dynamics modelling may be usefull in this process, but is not
the goal of the process. It is team learning which should be enhanced
what can be facilitated by system dynamics modelling. Another
goal of the group modelling process is to create consensus among
team members because consensus will create a basis for a decision
and commitment with its implementation.
Our client is a recently founded business unit.
As a result the clientís management team has to deal with
a lot of related issues, carefully thinking about both short term
and long term effects, taking into account various interrelational
aspects of decisions taken. How many people have to be hired?,
at what time?, how much training is needed?, will people be trained
internally or is outside expertise necessary?, how many orders/projects
can be accepted?, what is the rate personnel is gaining experience?,
can this process be accelerated?, etc. etc. Not only the answer
to each question in itself is important, but how will certain
choices influence other decisions made already or yet to be made.
What actions have to be taken to realise certain growth scenarios?
Indeed lots of challenges for a young and ambitious management
team. The objective of the project was to support the clientís
management team in clarifying the situation described, reducing
complexity and leading to improved effectiveness of decision making.
Participative Business Modelling
We used in this project a modelling approach
called "Participative Business Modelling" or "PBM"
which is a combination of business modelling from a system dynamics
point of view and from a process consulting perspective. In PBM
a client group (managers) facilitated by one or more experienced
modellers / process facilitators develops a model of the issue
in a number of group model building sessions. During a project,
if applicable, you can see a shift from qualitative, conceptual
models to quantitative, simulation models. Of course each stage
in the process requires from the coaching consultant(s) a different
combination of content expertise, process expertise and modelling
expertise. PBM contains techniques and guidelines for this whole
In a number of workshops the clientís business was modeled using causal loop diagramming. Causal loop diagramming proved to the client to be a very valuable way to capture various complex issues. The participants expressed that the advantages of causal loop diagramming are threefold:
The work done in the workshops with the clientís management team resulted in two causal diagrams one of which surely more looked like a huge plate of spaghetti then a valuable way of representing complex issues.
To present the causal loop diagram in an accessible manner to people not involved in the process we made a breakdown of the complete causal loop diagram to causal diagrams related to a limited number of core subjects:
The causal diagrams related to these subjects
certainly overlap to some extend. However presenting them in one
figure would certainly not contribute to a general feeling of
understanding; neither for the model presented nor for the method
The objective the project team was to build a comprehensive understanding of various factors each having their impact on bussinesís performance over time. The aim was not only to start a process of gaining knowledge on a personal level among the individual team members but also to enhance a process of team learning.
When asked all participants confirmed that
they undoubtedly (personally) learned a lot in the workshops.
The various discussions during the sessions showed however that
the team as a whole also gained knowledge and as a result now
has a shared mental model being more elaborate than the cumulation
of the individual mental models. The process of learning even
already was extended to a third level of organisational learning
by using the models and new insights in sharing gained knowledge
The results of the causal diagramming part of the project primarily showed that various relations are not that straight forward as often considered. Not having a comprehensive scope on a situation certainly limits the long term overview. This limitation possibly induces actions leading to (unwanted) short term optimisation.
The method of presenting the clientís situation using causal relations proved to be very useful and provides a powerful instrument to easily transfer to others knowledge gained.
The process of causal loop diagramming revealed a number of important control variables and led to some content related conclusions.
The project continues in building a quantified
model in which the process of growth of the clientís business
can be studied under various scenarios.
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