What's about time? Readers of this occasional blog are thinking "Yeah, its about time he posted something!" True, but not the answer I'm thinking of:)
The practice of management is about time. It is about making a decision in the present that will affect results at some time in the future. Peter Drucker used a somewhat unusual word for this in his famous tome "Management: Tasks, Responsibilities, Practices." He wrote about the "futurity" of decisions. If you look up futurity you will mostly read about horse racing. However, the definition that I think Drucker meant is "state of the future." According to Drucker, to manage well is, in part at least, to have a good grasp of what the future state of the business system will be as a result of a decision taken today.
How
do managers anticipate the consequences of their decisions? Most commonly
I think managers rely on "experience." Through experience managers
develop an internal "mental model" (aka "Gut Feel" or "Hunch") of how the world works and the
likely results of their actions. Unfortunately, mental models are
notoriously unsatisfactory. Most often they simply project the current reality
into the future -- plus or minus 10%.
In recognition of this the use
of analytic approaches to evaluating decisions has become more common.
Unfortunately, many of these analytic models suffer from a similar
problem to mental models. They often work, in essence, by taking
historical patterns of behavior and simply projecting them into the
future.
Dynamic (ie time based) simulation models, whether of the "agent based" type or of the "system dynamics" type, provide an analytic approach that is based on the underlying causal drivers of results over time. As a result these analyses surface a broad range of possible decisions many of which will not have been considered without the help of the "dynamic" or "time based" framing.
When the simulation is combined with data from effective information systems dynamic simulation models provide a rich perspective on the futurity of decisions.
