Working In Uncertainty

Dynamic Experience simulation

First published 27 January 2004.

Contents

What kind of simulation are we talking about?

Attached to this web page, by a link shown below, is another web page chock full of Javascript and bursting with Dynamic HTML tricks that gives you the experience of driving a simple organisation forward, week by week, or on other cycles if you prefer. You can see the full history of the previous year, the results of your actions, and even clues about what might happen in the future.

There are numerical summaries and charts. You can even set up budgets and see budget variances to see how budgetary control compares with alternative methods. My seven year old son enjoyed playing it with me, got the idea from one run through, and happily participated in decision making. "Wow. 69 thousand. That's better than last time!" he said at the end.

This simulation doesn't have everything you could want, but it's got a lot!

At the end you can see an analysis of how you used your time as well as reviewing your results.

Who needs it?

This simulation is for anyone who is interested in dynamic alternatives to control by fixed targets such as budgets. You can get a better understanding of how some of the techniques written about on my website and discussed elsewhere (e.g. by the Beyond Budgeting Round Table – www.bbrt.org) might work for you in practice.

However, it is particularly aimed at people who are running projects to introduce more adaptive management methods to an organisation. (The idea was first suggested to me by someone who is in just this situation.) You may not see exactly what you want in this simulation but the chances are the framework will work for you so why not talk to me about a custom version? I describe some alternatives below.

Try it now

The simulation is at ‘beta test’ stage i.e. it has some bugs in it but just about everything works. If it asks you about sending an e-mail, just Cancel.

Instructions are in the simulation so without further ado click here, then come back when you've finished.

Some possibilities

Here are some different ways the simulation could be used, including ideas for variations on the software currently available. (Use of the version on this website is free, but modifications and help using it are not.)

  • Making your case: There are alternative ways to play the game. I believe, though I have not yet confirmed by testing, that a team of accountants trying to play this game with budgets would be beaten soundly by a seven year old who plays using the ‘Chart Plans’ display to see trends and manage variability. I suspect that playing 32 weeks will usually beat playing 8 periods of 4 weeks at a time, and working in ‘quarters’ will be worse still. I also believe that players who pay attention to the Clues to the Future will do best of all, but only if they can work fast enough. Finally, I suspect that virtually nobody will learn anything worthwhile about the relationship between sales effort and sales (just like in real life) unless some new graphical and statistical functions are added.

    Most important of all, this simulation shows that ditching fixed targets doesn't mean losing control.

    If these are points you want to make this could be the tool for you. If you have other ideas too perhaps the tool can be adapted. Since it's just a web page distribution is as simple as putting something on your intranet.

  • Training: If your new, adaptive management model has been sketched out and you want to train people to use it the simulation could be adapted to more closely match the features of your business and the information displays you want to use. It takes people several attempts in practice to get the hang of a new form of analysis so instead of waiting months for the experience to build up, why not use a simulation to build up years of experience in just a few hours.

  • Practical experimenting: You can experiment with alternative ideas for your management model by playing in different ways and seeing what results you get. I can also make the software play games automatically for you using policies you devise, driven by parameters. This can speed up the experimentation.

    In particular the design of reports for your management system can be tested by putting a similar report into the simulation and exploring how people actually think with it.

  • Academic experimenting: If you are a student or researcher you may find something here that inspires you to test some theories about adaptive management systems. A good idea could get my support without money changing hands.

Other potential variations to the simulation include:

  • Changing the amount and type of randomness in the environment.

  • Adding somewhere to enter forecasts and also reports of variances against forecasts.

  • Adding more uncertainty – for example making actions taken slightly different from those planned.

  • More information about events that have actually taken place.

  • Better charts of potential future events, such as impact distributions and expected values.

  • Improved display of trends and variability statistics.

  • Putting costs on time and information used.

  • New graphical and/or statistical analysis of the relationship between sales effort and results.

Summary

A simulation is not the same as reality, but the simulation featured on this page has many realistic features. If you're fed up with theoretical discussion of adaptive management why not try the experience, safely, with this simulation and see what you learn?


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Words © 2004 Matthew Leitch. First published 27 January 2004.