Cause-alities

Big Data, Analytics, And Storytelling

“I think storytelling is becoming one of the new frontiers,” said Luke Lonergan, co-founder of Greenplum, now part of EMC Corp. But beyond that, “it really matters a lot to bring the brain to the problem in a way that you can untangle the complexities.”  "Social Media, Genomics Driving Data Tsunami" Wall Street Journal 18 Feb 2011 http://on.wsj.com/g9Lt5A

I've found many times that it is very difficult for audiences to use and consume analysis -- no matter how insightful it might be.  I suspect this is why effective analysts always find and present "the story" that the data tells. Audiences, especially many decision makers, simply glaze over when presented with the details of a complex analysis.  But presented as a story they can interact, explore, test, and consume the analysis.   Used correctly, storytelling can be the common language for both consumers of analytics and the those that truly revel in the abstractions of the analysis process.

There is a measure of irony in Lonergan's comment about storytelling being a "new frontier" since it has to be one of the most ancient and powerful modes of human thinking and communication.  I'm guessing he means storytelling as a means to facilitate the application of big data (I don't know Lonergan, although I'd like to, so all I can do is guess) and that would be a new, but not unprecedented, application for storytelling.

I think that storytelling is more than a communication mechanism -- something that we think about after the analysis is complete.  Storytelling can provide an analytic framework.  As I read the interesting WSJ blog post and got to Lonergan's quote at the end I was prompted to describe some of my thinking about the relationship of storytelling and analytics and explore some ideas about how it might be relevant to the promise of "Big Data".

Outcome Maps

There are a lot of reasons to create system simulation models.  Many efforts start by simply wanting to understand what is causing some situation to develop; or, just the desire to understand how things work.  In these cases a simulation model becomes a rich and transparent cause-and-effect hypothesis.   Now, let me observe that having a solid understanding of how your business (or whatever you are exploring) works, its driving structure, and the baseline values of its parameters is a basic and broadly useful result in and of itself.  One that is surprisingly rare. 

However, in this "what have you done for me lately" world, inevitably, the "so what?" question comes up.  As in, "So you have a simulation model . . . so what?" Because, as soon as a basis for system understanding has been established, we want to improve, control, change, the system.  We want to make insightful resource allocation decisions.  So, as I've discussed many times in this blog, it's usually not enough to build a system model simply to know how things work -- we need to think about how to harness it to do useful work.

This is trickier than it might first appear. Commonly, the initial approach runs along the classical scientific reductionist line: "Now that we have a model that predicts the future we simply act in accordance with that insight."  This is so common it has a name: The predict-and-act decision framework.

In a very real sense, however, system models don't predict the future.  They describe the cause-and-effect physics that connect our actions with assumptions about the future that lie outside our control.  They describe the rules that allow us to "shape" but not dictate the future.

As the saying goes, this is not a bug, it's a feature.  Because, shocking as it might appear, good decision making does not require that we predict the future.  Good decision making requires that we understand the implications of our actions. System modeling is a practical way to differentiate the implications of our decisions from uncertain factors that are out of the sphere of our influence.  And by doing so we gain deep insight into both.

Working with my clients I've created a visualization that helps them put their system model to use in a decision making environment.  I call it an "Outcome Map". I've drawn heavily on work from "Real Options" and "Robust Decision Making" and married it to system simulation.  Take a look at this Prezi to learn more. 

Some Prezi Hints: After you fire up the Prezi, use the "more" menu to switch to full screen mode.  Advance the presentation using the "next" arrow at the bottom. After seeing the presentation explore the canvas using the pan (left click and drag) and zoom (scroll wheel).

It's Fact-Based AND Quantitative

As one would expect I spend a lot of time describing how system modeling works as a problem solving approach.  My usual description -- in fact the one that I wrote again this morning -- goes something like this: 

"System Modeling works by explicitly mapping the causal drivers that link today's resource allocations (your management decisions) to future outcomes. The technique provides a fact-based, quantitative, and transparent basis for management policy development."

Since we're describing simulation models that run on a computer it's easy to assume that all of the "facts" in the simulation are quantitative as they appear to be in a spreadsheet. But in a systems model that's not really true.  The "non-quantitative facts" identify people and things in the system and, crucially, the logical relationships between those things. They describe the "physics" of the system.  Things like "We have to provide a quote to the prospect before they can buy it".  Or that "I have to build a widget before I can put it in inventory".  Or that "I have to ship it from inventory to get it to the customer".  Sometimes the physics are about human behavior:  "If supply is constrained I need to accelerate ordering" is an all time favorite of mine.

Maybe this seems simple and obvious.  But the sum of all of these relationships is often complex and (this is important) can feed back onto itself in a feedback loop.  Also, these facts may be well known to the players in the system but they are seldom written down anywhere and are therefore "implicit" knowledge. 

Finally, I don't know of any other modeling or problem-solving approach that offers to capture these causal relationships, marry them to the quantitative data (eg: how long does that take? How many of those things are there?) so that potential management policies can be evaluated in light of "all of the facts".

Why Model?

I recently ran onto a short paper (speakers notes, really) by Joshua M. Epstein titled "Why Model?"  I spend a lot of my life answering that question and I am excited by Epstein's concise, reasoned explanation.  He boils it right down to the basics:

1. We're all modelers, but most of our models are implicit, not explicit.
2. Sometimes we model to predict.
3. Sometimes we model to explain.
4. And there are at least 15 other good reasons to build explicit models . . .

In some sense Epstein's position on modeling is a presentation of the scientific worldview and its moral advantages.  So, mixed in with some really concrete reasons (eg: #2 -- Guide data collection) are some seemingly more esoteric objectives (eg: #6 -- Promote a scientific habit of mind).  

Alas, business, financial, and other organizational leaders are mostly not swayed by a "scientific approach".  I find that business and organizational clients generally need an additional level of motivation to justify an investment in explicit modeling.  Usually, for the business person it is not enough to believe that an investment in explicit modeling will accomplish any of Epstein's 16 reasons.  The business person wants to know What Then?  Often phrased as a somewhat derisive "So What?"

For most business leaders explicit modeling has to be linked to some decision making or problem solving process.  And, unfortunately, this often boils down to a focus on prediction at the expense of the other 16 reasons that are also part of excellent decision making and problem solving.

If you like this paper by Epstein try his book Generative Social Science: Studies in Agent-Based Computational Modeling.  It's one of my favorites.

Decisio Described Concisely

I was having coffee with a colleague recently and he challenged me to be much more concise and concrete about what makes Decisio's approach to modeling, simulation, and analysis novel and valuable. In response I've boiled Decisio's proposition down to four dimensions.  In this post I am going to try to summarize these as concisely as possible. In future posts I'll elaborate each one and present some concrete examples.

The first dimension is purpose. Modeling and simulation is used for a wide array of purposes. Decisio uses modeling, simulation, and visualization to support decision making and problem solving.

 

The second dimension is application. Models don't make decisions, people do. People do it by developing a belief about how the relevant part of the world works and then acting on this belief. I call this process sense-making. It can be very hard for people to accomplish it successfully when faced with difficult circumstances. Decisio uses modeling and simulation to accelerate and improve people's ability to make sense when faced with unique, unfamiliar, complex, and ambiguous circumstances.

 

The third dimension is modeling technology and approach.  Dynamic systems models are uniquely capable of describing the time based interactions of relevant actors and processes, of which there may be many. The ability to describe all of the relevant structure and resulting behavior over time makes systems models the tool of choice to support the sensemaking process.  Agent based modeling and system dynamics modeling techniques form the core technical approaches.

 

The fourth dimension is managing and accumulating knowledge.  Explicit systems models are artifacts that become the means to share understanding between individuals and groups, support collaborative development and expansion of knowledge, and support the reuse of insight.

Well, I think that is about as direct as I can make it!  Let me know what you think!

Making Sense and "Barabba's Law"

Through the years I've had the good fortune to work on several complex projects for Vince Barabba (more about Vince here and here).  Vince is a true leader -- visionary, creative, and effective.  One of the management approaches he often applied was the use of modeling to help him and his team understand a complex situation and make good decisions.  In fact, I consider Vince the ultimate "model consumer."  That is, he did not write complex systems models -- he used them and guided others in their use and interpretation.  This paper provides one detailed example of how he worked.

Vince had a guiding principle in the application of complex models that became known as "Barabba's Law".  Here it is:

Never Say "The Model Says"
-- Vince Barabba

I've think I've sat in a hundred meetings where we were using a systems simulation model to understand some complex, uncertain, situation and at some point someone would say -- but the model says . . . .  If you where working on a project for Vince (or even if you had EVER worked on a project for Vince) then you knew it was time to pause the action and reflect about what was happening.  Because as soon as those words are uttered then somebody is about to depend on the model as a literal prediction of the future instead of a tool to "make sense" of the situation to support their decision making.

I started writing about sense-making in my last post but here it is again:  Making Sense is the development of situational awareness including an understanding of the future trajectory of the system.

At the time, though, I didn't spend much energy thinking about the underlying philosophy of Barabba's Law.  What I observed is that forcing a different choice of language inherently guided stakeholders towards a different and more effective application of the modeling.  The nature of the team discussion changed from predictive thinking towards evaluating the correctness and completeness of the underlying causal hypothesis that the model represented. 

Barabba's Law closes the, often disastrous, thinking shortcut that allows leaders to abdicate responsibility for understanding the relevant system and its behavior. ( "Gee, we thought we were doing the right thing because the model said we were. . ." )

I think that one of the reasons Vince was so effective in using sophisticated models is that he instinctively understood the difference between prediction and sense making (although I never heard him use exactly those words).  Through his extensive experience he understood how leaders actually make decisions and he knew how to integrate sophisticated modeling into that process.  And he distilled some of that into his law.

Making Sense with Systems Science

When I named Decisio (almost 10 years ago now!) I was casting about for a tag line that extended the "decision motif" to capture the essence of what we do.  I settled on "Making Sense of the Future."  My idea was (and is) that if clients are going to be able to make good decisions in complicated situations then they first had to understand that situation -- they had to "make sense" of what was happening.  Then, they could use that understanding to make good decisions.  The invocation of the "future" in this was intended, firstly, to suggest that comprehending the role of time is important to understand problems.  Secondly, that we make decisions today in order to reap rewards in the future.

This idea of using systems modeling to "make sense" and support decision making was not and still isn't very common.  There seem to be two prevailing ideas about the role of models and modeling.  One common view is that they are sophisticated black box tools that consume data and produce predictions of the future.  My observation is that while good models have predictive qualities the future is slippery. All models are wrong (but some are useful). Decision making based on a "forecast" mentality will not turn out well.  An alternative perspective is that, since forecasting is difficult or impossible, modeling should be used for individual and organizational learning.  Well, that's fine but sooner or later somebody has to make decisions!

I've recently become aware of the science and some of the research around the formal idea of "sensemaking."  Gary Klein, well known in the field, describes sensemaking as "a motivated, continuous effort to understand connections (which can be among people, places, and events) in order to anticipate their trajectories and act effectively".  Well, that's exactly what I help clients accomplish using systems models.  In my projects the modeling activity guides an effective sensemaking process that results in high quality decisions.

Recently, I think I've been guilty of describing my work from the perspective of systems science and modeling to the detriment of the "making sense of the future" perspective.  In fact, successful projects always integrate modeling with the sensemaking perspective.

I think that the intersection of systems modeling and sensemaking is not as well explored as it needs to be so I'll be blogging more about it.   To read more about sensemaking in general try this wikipedia article and publications by Gary Klein and K. E. Weick.

What's System Science and Why Should We Care?

It is very common for people to use the idea of a "system" pretty freely when discussing their ideas, projects, and problems .  Alas, they often have a pretty fuzzy idea about what a system is and how that perspective can be put to work.   "Systems Science" offers a concise definition of a system that is easy to contrast with traditional analytics.  In this post I'd like to start at the beginning and try to create a clear mental image of what systems science is and how it provides useful insights.

Fish Tails and Teenagers

I found this New York Times story about a couple of high school students foray into genetic fingerprinting fascinating on so many levels.  Here it is in a nutshell:

. . . In a tale of teenagers, sushi and science, Kate Stoeckle and Louisa Strauss, who graduated this year from the Trinity School in Manhattan, took on a freelance science project in which they checked 60 samples of seafood using a simplified genetic fingerprinting technique to see whether the fish New Yorkers buy is what they think they are getting.

They found that one-fourth of the fish samples with identifiable DNA were mislabeled  . . .

As the father of a teenaged woman I know how clever and motivated these young folk can be.  There is nothing they cannot do if they set their minds to it.  I certainly related to one girl's father who noted this about their field technique:   “It involved shopping and eating, in which they were already fluent.”

At a different level, as a consumer of a fair bit of sushi, I'm totally appalled.  If you can't trust your sushi-master, who CAN you trust!?!

Finally, the usefulness of the DNA Barcoding Technique, despite its apparent limitations, is pretty impressive. I think that supermarkets should go way beyond just labeling fresh food with the origin.  I want a BAR CODE that I can read with a pocket scanner to determine EXACTLY what I'm getting.  Those green beans, for instance, what variety are they really? 

I'm going to setup a DNA Barcoding system in my garage . . . .

Creating a Future

I recently spent some time speaking with the director of a well known consulting firm about the possibility of incorporating complexity science models into his practice.  I was struck by his choice of language as he described to me what he was trying to accomplish for his clients.

He said that he was trying to make the "cause-and-effect relationship between the clients decisions and the resulting outcome clear."  For example, he went on to say that sometimes his clients did not seem to realize that saving $2 here was going to cost $2000 somewhere else.  Or, alternatively, the client might have a correct intellectual understanding of a situation but due to momentum or other pressures found it impossible to make decisions consistent with the outcome they wanted.  He went on to say that this was symptomatic of a general difficulty in seeing business issues holistically.

I got really excited as I listened to his story.  Recently, I have been wondering if naming this blog "Cause-alities" was wise. Much writing about complexity science seems to emphasize the elusiveness of cause and effect relationships and seem to suggest that we cannot understand the consequences of our decisions.  Well, this is where the "attitude" part of my blog's tagline kicks in.

In matters of management I think that leaders need to invest in understanding as much of the cause and effect chain that drives their business as they can. They will find the real value of a "systems understanding" (to rename the cause-and-effect chain a little bit) in the realization that, to a large extent, the future they get is the one that they create through the decisions that they make. 

This is a vastly more powerful notion than the traditional "predict the future and I'll react" mentality.

What this boils down to is that in much of the business system the "cause-and-effect chain" is really a "cause-and-effect loop."  And our decisions are in fact part of that "cause-and-effect loop."

In practice, the only way to develop deep causal insight into business systems is through a complexity science simulation model.  As I've written before a spreadsheet, while sometimes useful, is inadequate to describe how a business works because business systems are feedback systems and spreadsheets simply don't have the expressive power to describe feedback. 

Finally, I have to acknowledge that not everything that happens in our business is something that we created through our actions.  The environment is important and external events are important.  Nevertheless, in most cases, the trajectory of the firm is a result of management leadership, not outside factors.