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Strategy+Business Issue 40 Works on His Most Ambitious Computer Model: a General Such Complacency strate gy+business The Prophet of Unintended Consequences by Lawrence M. Fisher from strate gy+business issue 40, Autumn 2005 reprint number 05308 Reprint f e a t u r e s The Prophet of t h e c r e a t i v e m Unintended i n d Consequences 1 by Lawrence M. Fisher Jay Forrester’s computer models show the nonlinear roots of calamity and reveal the leverage that can help us avoid it. Photographs by Steve Edson d n i m e v i t a e r c e h t s e r u t a e 2 f Lawrence M. Fisher ([email protected]), a contributing editor to strategy+ business, covered technology for the New York Times for 15 years and has written for dozens of other business publications. Mr. Fisher is based in San Francisco. A visitor traveling from Boston to Jay Forrester’s maintain its current weight, producing cravings for fat- f home in the Concord woods must drive by Walden tening food. Similarly, a corporate reorganization, how- e a Pond, where the most influential iconoclast of American ever well designed, tends to provoke resistance as t u r literature spent an insightful couple of years. Jay employees circumvent the new hierarchy to hang on to e s Forrester, the Germeshausen Professor Emeritus of their old ways. To Professor Forrester, these kinds of dis- t h e Management at the Massachusetts Institute of Tech- comfiting phenomena are innate qualities of systems, c nology’s Sloan School of Management, also has a repu- and they routinely occur when people try to instill ben- r e a tation as an influential and controversial iconoclast, at eficial change. If you’re attempting to shift a complex t i v least in management and public policy circles. But system, such as a company, and you haven’t become e m whereas Henry David Thoreau famously urged aware of resistance or other unintended consequences, i n humankind to live a life of simplicity, Jay Forrester has then the problems are probably building under the sur- d spent the past 40 years trying to help people live more face and simply haven’t burst forth yet. effectively amid complexity. Professor Forrester’s understanding of complex sys- Professor Forrester, who turned 87 this year, is the tems derives in part from years designing servomech- father of a field of research and analysis called system anisms — the automatic control devices that inspired dynamics — a methodology that uses computer-based the field of cybernetics in the mid-20th century — for 3 models to simulate and study the interplay of growth the U.S. Navy. In his pioneering computer simulations, and equilibrium over time. Absorbing the implications Professor Forrester modeled the slow-to-emerge “tipping of these models in ways that Professor Forrester pre- points” (as writer Malcolm Gladwell would later call scribes can allow mere mortals to comprehend the them) that make systems difficult to manage, yet can obscure nature of (and counterintuitive solutions to) also provide hidden leverage points for effective inter- such knotty problems as environmental damage, the vention. Modeling this kind of growth and resistance boom-and-bust pattern of economic cycles, supply requires nonlinear calculus — a form of math so intri- chain malfunctions, and the pernicious side effects of cate that even the most gifted and highly trained math- well-intended policies everywhere. ematicians are incapable of solving nonlinear equations These problems, says Professor Forrester, are all in their heads. manifestations of the underlying nature of complex sys- Thus one of the most controversial aspects of tems, from living cells to organisms to organizations and Professor Forrester’s work is also his core premise. He 0 corporations to nations to the world at large. For exam- argues that most social organizations, from corporations 4 e u s s ple, there is generally a principle at work called com- to cities, represent a far higher level of complexity and i s s pensating feedback: When someone tries to change one abstraction than most people can grasp on their own. e n i s u part of a system, it pushes back in uncanny ways, first And yet corporate and government leaders of all sorts b + y g subtly and then ferociously, to maintain its own implicit persist in making decisions based on their own “mental e t a r t goals. Dieters know this well; a person’s body will seek to models” — Professor Forrester’s term for the instinctive s theories that most people have about the way the world “System dynamics is not biased toward any political works. These decisions, no matter how well intentioned ideology,” says John D. Sterman, a former Forrester or intuitively comforting, are decidedly inferior, he says, student and professor of management at MIT’s Sloan to policies and strategies based on computer models of School. “Some people apply it to help companies grow “system dynamics” — the interplay of complex, inter- faster; others use it to promote a sustainable world in related forces over time. As a result, Professor Forrester which corporations would have a lesser role.” Mean- argues, most of the pressing problems facing humanity while, adds Professor Sterman, “it’s clear that we need a today will elude solution until a new generation, famil- sustainable society where we don’t work ourselves to iar with computer models, enters leadership roles. death and consume ever more junk. Jay was one of the “The older the person is, the more the tendency to first to reach that conclusion through systems analysis inquire has been driven out,” Professor Forrester says. “It rather than an epiphany in the woods.” is much easier to bring system dynamics in at the grade- school level than it is at the graduate school, because Natural Complexity there is much less to unlearn.” People who work on farms become naturally attuned to Professor Forrester suffers repeatedly from one systems, if only because their livelihood depends on the unintended consequence of his own work: its habit of interrelationships among weather, soil, and plant and provoking infuriated responses from liberals (for his crit- animal growth. Jay Forrester’s interest in complexity f e icisms of urban planning in the 1960s) and conserva- began on the cattle ranch in rural Nebraska where he a t u tives (for his predictions of global environmental crisis grew up. (Slim and bespectacled, he resembles the male r e and collapse). If he was at first surprised by the clamor figure in the Grant Wood painting American Gothic.) “A s t h his works incited, over time this otherwise extremely ranch is a cross-roads of economic forces,” he later e shy, private person came to enjoy playing the provoca- recalled, in a 1992 autobiography. “Supply and demand, c r e teur. Meanwhile, Professor Forrester’s influence, particu- changing prices and costs, and economic pressures of a t i larly in business circles, is broader than his modest name agriculture become a very personal, powerful, and dom- v e recognition might suggest. Several of his former students inating part of life.” He was a natural systems engineer; m i have written bestsellers based on his work — including as a senior in high school, he built a 12-volt wind-driven n d Peter Senge, author of The Fifth Discipline (Doubleday, generator, using cast-off automobile parts, that provided 1990), which posited a new kind of “learning” organi- the first electricity on his family’s ranch. At the zation, and Dennis and Donella Meadows, Jørgen University of Nebraska, he earned a B.S. in electrical Randers, and William Behrens III, who wrote The engineering, which was then the only academic field Limits to Growth (Potomac Associates, 1972), which with a solid core in theoretical dynamics. From there he became the ur text of the global sustainability movement. went to MIT, lured in part by the offer of a $100 per 4 Former Royal Dutch/Shell group planning coordinator month research assistantship. Arie de Geus, market wizard Ed Seykota (inventor of the At MIT, Jay Forrester met Gordon S. Brown, who first commercialized computer trading system), and would become his mentor and closest friend. Professor Will Wright, inventor of the computer game “Sim Brown had founded MIT’s Servomechanisms Lab- City,” have all named Professor Forrester as a key influ- oratory. During World War II, when Jay Forrester was ence. Peter Drucker tagged him long ago, in the 1975 there, the lab pioneered the use of feedback control sys- book Innovation and Entrepreneurship, as the most “seri- tems. These systems used signals (“feedback”) that ous and knowledgeable prophet” of long-wave trends. tracked the positions of rotating radar antennas and gun The principles of system dynamics have been incorpo- mounts to help moderate their movements and thus rated into scenario planning, wargaming, “lean produc- gain precision. At one point, Jay Forrester was dis- tion,” and supply chain management. More than a patched to Pearl Harbor to repair a radar antenna con- dozen universities, most prominently MIT, have business trol system that he had designed for the aircraft carrier school departments devoted to the field. Project-based Lexington. The ship left harbor with him on board, still learning, now a popular method in elementary school at work, and soon encountered heavy fire from Japanese education, derives directly from extensive efforts over the aircraft. When a direct hit severed a propeller shaft and past 15 years by Professor Forrester and others to extend threw the ship into a hard turn, Professor Forrester system dynamics concepts to the K–12 classroom.
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