Académique Documents
Professionnel Documents
Culture Documents
MISPERCEPTIONS OF FEEDBACK Subjects were unable to account well for delays and feedback
A UBIQUITOUS HUMAN LIMITATION effects because (1) peoples mental representations of complex
tasks are highly simplified, tending to exclude side effects,
Engineering management stresses the importance of project
feedback processes, delays, and other elements of dynamic
performance indicators MTBF, BCWP, BCR, etc etc. An
complexity; and (2) even when these elements are known,
implicit and fundamental assumption behind the selection of
peoples ability to infer correctly the behaviour of even simple
business performance indicators is that the feedback they
feedback systems is poor.
provide will cause decision makers to make appropriate
adjustments to the inputs or processes. This presumes decision The implication of this work is that managers require
makers can judge with reasonable accuracy the consequences specialised decision support tools to respond appropriately to
of their decisions. performance indicators impacted by delayed feedback.
However, there is abundant research in the field of system The Civil Engineering School at ADFA runs undergraduate
dynamics [1], as well as in the fields of experimental and postgraduate units in system dynamics modelling to give
economics and psychology which suggest that managers have students the intellectual and analytical tools to address such
great difficulty managing dynamically complex tasks. Sterman cognitive limitations. The following case study forms the
argues persuasively from his work at MIT that there is foundation of the undergraduate unit.
systematic misperception of feedback especially when there
THE CASE STUDY SCENARIO
are delays in the system. Mosekilde, Larsen and Sterman [2]
present the results of 48 simulations of the Beer Game [3] (a ThreeTwoOne-Ready Pty Ltd owns a small urban concrete
simulation of a simple factory-warehouse-retail system) run batching plant. Competition is stiff and ThreeTwoOne-Ready
with 192 MBA students and senior business executives. The knows that client service is paramount. An inability to respond
results show that their decision-making on the basis of fairly on time and on quality to customer demands will lose orders in
straight forward performance indicators, but in the face of the short-term, and clients-base in the longer term.
delays, resulted on average in costs 10 times the optimum!
Initially the company owned three delivery trucks and utilised
Simulations at the Australian Defence Force Academy show a additional owner-driver trucks for peak demand, for which it
similar pattern. In both the MIT and ADFA simulations, paid a premium. Company directors invested in two additional
managers and graduate students failed to comprehend the trucks on the basis of a review of demand patterns. However,
significance of feedback in the face of delay induced dynamics. even with five company-owned trucks, customer demands
cannot be fully met without supplementation. The company is
In more recent experiments, where graduate students had full
struggling to build a reputation as a reliable and responsive
information, training, incentives and opportunities for gaining
supplier. Directors of ThreeTwoOne-Ready are increasingly
experience, Diehl and Sterman still found poor managerial
anxious about the companys ability to remain competitive in
performance in the face of variations in feedback strength and
the longer-term.
delay. [4] They found the subjects were often outperformed by
a simple no-control rule. That is, totally random business A year ago the directors advised staff of the plan to invest in
decisions gave better results that the considered judgement of additional trucks, increase office staff and simplify the
their MBA students. Diehl and Sterman argue that the mental ordering workflow procedures. Instead of the expected
constructs and heuristics that managers bring to bear on accolade, they were met with a barrage of complaints about
complex tasks are fundamentally dynamically deficient: antiquated plant, excessive working hours and the ignoring of
employee suggestions on productivity improvement.
In the event, these measures did not solve the supply problems. Policy
Truck efficiency in fact decreased, while average response implementation
influence diagram.