After explaining how we can depict people or groups’ mental models in Insight maker (https://galaxiez.com/2020/02/18/how-to-model-mental-models-in-insight-maker/), it’s about time to explain how we can run those models as simulation and get some insights.
This post takes into account that you are familiar with System Thinking and Insight Maker. For your convenience, you can find more data in my previous posts. Start with the links to the 1st, 2nd and 3rd posts.
In my last posts, I covered how to use stocks, variables, and states to define how each player sees activity and what is the most important goal of that activity from his point of view. We also discussed how we need to connect all the elements in the model to depicts different mental models and the overall activity.
In this post, we are going to leverage the same diagram and with minor adjusting run it as a simulation that will help us to understand which mental model has an impact on the current reality.
The only change that I made comparing to the previous post was creating a ghost primitive of risk level and replace the one in the Legal agent with the ghost primitive. I did it to measure the same stock “Risk Level”.
There are two types of primitive we want to depict during the simulation. Stocks, which represent what each agent cares about. Sates, which represent agent states transitions. In this post, we will demonstrate how to set data and run simulations for the stocks. Based on this post you can also change states and observe how mental models impact agents states.
The first task is to add values to the relevant variables following the loops (causality) that we already defined. In our scenario, the flow starts from IT, moves to Purchasing, HR & Legal, Purchasing and back to IT.
Once we have the data flow between the relevant variables, we should define how the variables should increase or decrease the defined stocks per agent. The same process should be applied to changes in states. The lines are already in place. We just need to add logic.
Our flow of variables includes IT-Contracts, Purchasing-Requests Contracts, Purchasing-contracts for review, HR & Legal-Contracts, HR & Legal-Workload, HR & Legal-Risks, Purchasing-negotiating contracts, Purchasing-Ready contracts, IT-Delayed contracts, IT-finished projects.
We will use the same data we collected and used to create the stocks & flows diagram created for the purchasing-contract example.
IT-Contracts – Depicts the same value we used before. 10 vendors that produce between 1 to 10 contracts a month.
Purchasing-Requests Contracts: The value from IT-Contracts
Purchasing-contracts for review: – The value from Purchasing-Requests Contracts.
HR & Legal-Contracts: The value from Purchasing-contracts for review
HR & Legal-Workload: % of the current workload. 60%.
HR & Legal-Risks: HR & Legal-Contracts * (1-0.6). The % of contracts HR & Legal can work on.
Purchasing-negotiating contracts: The number of contracts processed by HR & Legal (HR & Legal-Risks).
Purchasing-Ready contracts: Same as Purchasing-negotiating contracts.
IT-Delayed contracts: [Requested Contracts]-[Ready Contracts]
IT-finished projects: [Contracts]-[Delayed Contracts ]
After setting the flow data we need to add the right logic to increase or decrease the value of the stocks (which represent what agents cares about):
“Finished projects” increases both “Successful Finished Projects” and “Customer Satisfaction”. “Delayed Contracts” decrease both of them. I divided the contract by 10 for customer satisfaction to increase or reduce based on several successful or failed projects.
“Ready Contracts” increases Cost Reduction. I divided it by 10 to depict the average contract that purchasing managed to decrease cost.
“Risk Level” is increased by any contract for review (Contracts) and decrease by any contract that was reviewed (Risk)
Running the simulation will produce more or less the below results:
You can see the correlation between Risk and successful projects. There is also the same trend between finished projects and customer satisfaction. You can see clearly that Cost reduction is not impacted. This view helps to see the impact of risk-aversion on projects and customer satisfaction.
It’s important to understand that those mental models not necessarily depict reality. They depict how different elements in an organization sees the reality from their point of view.