14 obvious truths

Jay W. Forrester

Founded in the mid1950s.the field of system dynamics has intellectual roots reaching much further into the past. The Archives section of the Review seeks to publish material &om that past which can contribute to current theory and practice. The section welcomes previously unpublished but deserving system dynamics work, classics from past system dynamics literature that should receive renewed attention, and previously published articles from other disciplines of particular significance to current system dynamicists. Conkibutions emphasizing the philosophy and theory of model building, validation, implementation, education, and generic structures are particularly encouraged. Submissions may range in length from notes to main articles but may be edited. Send suggested material. together with a brief introduction placing it in historical and current contexts, to John D. Sterman. System Dynamics Group, M.I.T. E40-294, Cambridge, MA 02139,U.S.A.

The following 14 pointsfirst appeared in TheImpact of Feedback Control Concepts on the Management Sciences, originally delivered as the 1960 Distinguished Lecture of the Foundation for Instrumentation,Education, and Research and reprinted in The Collected Papers of Jay W. Forrester (Cambridge,Mass.:MITPress, 1975). Thepaperisnearly30years old, but it is remarkable how many of its points remain relevant today, despite tremendous progressin somearms (such as the recognition of unstable behaviorin many systems). Such continuing relevance arises in large measurefrom Forresters vision of system dynamics as a pmgmatic tool whose ultimate purpose is to improve the functioning of social and economic systems. The different goals of the operator,such as a manager, who must choose a course of action now, and the observer,suchas the academic, who seeks to add to the stockpile of knowledge, account for much of the persistence of the viewpoints and methods Forrestercriticizes here. Whilenot all modelers will (or should) agree with each of the followingpoints, it is usefu1,from time to time, to raise unquestioned assumptions to the suQace, where they can be examined, debated, and revised. John D. Sterman
A number of obvious truths seem to have been accepted in varying degrees as the

philosophical guidelines for much of the search for a scientific foundation underlying management and economics. All of the following appear to be given at least some credence, and all seem to me to be misleading:

1 Linear analysis .
That a linear analysis is an adequate representation of industrial and economic systems. Almost every factor in these systems is nonlinear. Much of the important behavior is a direct manifestation of the nonlinear characteristics. The amplitude of excursion of system variables is so large that small signal linear analysis is not suitable.

2. Stable systems
That our social systems are inherently stable and can be attacked with methods that are valid only for stable systems that tend toward equilibrium. There seems ample evidence that much of our industrial and economic behavior shows the characteristics of an unstable system. Many industries are characterized by an unstable, nonlinear, self-limiting systems behavior.

3. Prediction function
That the obvious purpose and test of a model of an industrial system is its ability to predict specific future action. We should use a model to predict the character and the nature of a

System Dynamics Review 3 (no.2, Summer 1987): 156-159. ISSN 0883-7066. a1987 by the System Dynamics Society.
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system and for the design of the kind of system that we desire. This is far different, less stringent, and much more useful than the prediction of the specific future times of peaks and valleys in a sales curve.

4. Data
That the construction ofamodel must be limited to thosevariables for which numerical timeseries data exists. A model of system behavior must deal with those variables which are thought to control system action. If data has not been collected in the past, best guesses must be substituted until measurements are taken.

5. Accepted definitions
That a model must be limited to considering those variables which have generally accepted definitions. Many undefined concepts are known to be ofmajor importance. Integrity, hope, research output, quality, customer satisfaction, and confidence must all be given definitions and be incorporated in those system models where they are presumed to be important.

6. Descriptive knowledge
That our vast body of descriptive knowledge is unsuitable for use in model formulations. Just as formal numerical data has been the preferred ingredient for model making, so has the wealth of information in the business press been rejected. Business Weekand The Wall Street journal lack academic stature even though they may contain the clearest and most perceptive published insights into the reasons for industrial managers decisions.

7. Exact versus social

That there is a sharp distinction between the exact and the social sciences. At the most this is but a quantitative distinction and at the least there is no distinction at all. Exactness and accuracy must be measured not in terms of the number of decimal digits. This accuracy of measurement has been developed because it was needed. The next advancement is based on the preceding level of accuracy. Dramatic progress is possible in the dynamic behavior of industrial systems using parameters which may be in error by a factor of 3-which are not even correct in the first decimal place.

8. Source of analogy
That the physical and genetic sciences provide the proper analogy for model building in the social sciences. The laws of physics usually relate to open systems rather than to

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information-feedback systems. Furthermore, they relate to fragments of systems rather than to entire systems. A much better analogy exists in the engineering and military modelsmodels of telephone systems, of aircraft, of military systems, and of missile controls.

9. Accuracy of structure
That accuracy of parameters is more important than system structure. A great deal of time and effort in social science is devoted to the measurement of parameters. Yet these parameters are put into models which I believe do not belong to the general class to which the actual systems themselves belong. Correct parameters can hardly succeed in a grossly incorrect model structure. Here I refer to the failure to deal adequately with those factors that give information-feedback systems their characteristic behavior.

10. Accuracy versus precision

That accuracy must be achieved before precision is useful. The ability to precisely state a hypothesis and to examine its consequences can be tremendously revealing even though the accuracy of the statement is low. A precise and explicit statement with assumed numerical values will tell us the kinds of things which can happen. Should these things be important we can later devote attention to improving the accuracy of their statement.

11. Optimum solutions

That it is necessary to find optimum solutions to managerial questions. Tremendous gains lie ahead in systems management. Mere improvement will often be dramatic even when it falls short of some optimum. Optimum solutions are generally possible only for naively simple questions. More is to be gained by improving areas of major opportunity than by optimizing areas of minor importance.

12. Controlled experiments

That the social sciences differ fundamentally hom the physical sciences by inability to conduct controlled experiments. Again, this is not more than a matter of degree. Controlled experiments in engineering are done with models. The models are as complete and realistic as our knowledge permits. The same concepts in using a model are possible in management and economics. Effective models are entirely feasible with present technical resources. We have only to construct the models and then the laboratory experimental stage can begin .

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13. Human decisions

That human decision making is obscurely subtle and impenetrable. The major factors to which a decision is responsive are relatively few in number. They are usually subject to clarification if properly approached. Once we have dealt with a relatively few properly selected factors, the remaining ones can be relegated to a noise and uncertainty category.

14. Decision versus policy

That emphasis in models should be on decision making. The sharp distinction between policy and decision has been obscured. Too much attention has been concentrated on the individual decisions and not enough on the policy which governs how the decisions are made. Models of industrial systems should be directed toward policy. In other words, what are the rules by which information sources are converted into a continuous flow of decisions? The present-day emphasis on the management game as a training device arises from a misplaced concentration on decisions rather than on policies.