Systems Thinking in the Development of Strategy Against Somali Piracy

While currently a Technical Instructor of System Dynamics at MIT, I am actively searching for a position in which I could use System Dynamics as a tool to develop innovative solutions to business, policy, technology assessment, strategy, and organizational challenges.

An example of the innovative possibilities of a systems thinking approach to contemporary problems can be seen in a (3) month team project for the MIT course ESD.33 - Systems Engineering, during the Summer of 2009.

My MIT SDM team project's development of an effective international policy to resolve Somali piracy in the Gulf of Aden is an example of how individuals from a variety of backgrounds are able to apply system thinking to solve many of the problems associated with complex systems that are becoming more prevalent over time.

The ESD.33 project team members were:

• Charles Atencio, SDM 2009
• Mario Montoya, SDM 2009
• Vijan Bhaumik, SDM 2009
• Clayton Kopp, SDM 2008
• CDR Doug Schofield, USCG, SDM 2009

The System Engineering V-model was used as a framework in the application of the following development tools:

• System Dynamics (SD) causal loop diagrams to identify stakeholder needs, problem context, and solution objectives.

Master System Dynamics Causal Loop Diagram (click the image for a full-size view)

• The simplified causal loop diagram identified (8) major causal loops:
  
• Internal Somalia Causal Loops
• Economy / Infrastructure (Reinforcing)
• Government Stability (Reinforcing)
• Tourism (Reinforcing)
• Pirate Gang Insurgency (Reinforcing)
• Pirate Gang Funding (Reinforcing)
• External Somalia Causal Loops
• Shipping Costs (Balancing)
• Shipping Reliability (Balancing)
• Supply Chain Stability (Balancing)
• Naval Operations (Balancing)
• Naval Costs (Balancing)
  

• Object Process Methodology (OPM) to architect requirements.
• (4) critical operands and (4) solution neutral functions.
• (9) system function attributes leading to (10) concept evaluation criteria.
• Quality Function Deployment (QFD) to prioritize customer requirements.
• Pugh Concept Selection to iteratively determine the best solution concepts.
• Pugh analysis round one entailed (20) possible policies narrowed to (4).
• Pugh analysis round two entailed (4) policies narrowed to (1) short term and (1) long term policy.
• Short Term Policy - establishment/enforcement of high-seas safe shipping corridors.
• Long-Term Policy - Somali internal law enforcement, judiciary, and infrastructure reconstruction.
• Cost Benefit and Risk Analysis to determine best solution implementation.
• Verification and Risk Mitigation to verify solution design to requirements and solution robustness.

 Project Presentation Poster (click the image for a full-size view)

Our Policy Recommendations were as follows:

• Short Term (1-5 years approx)
• Adoption of United Nations safe shipping corridor resolution within (1) year.
• Establishment of United Nations naval coalition to provide naval ships and crews for enforcement and protection of corridor.
• Establishment of naval coalition command and control active tracking system for ships within the corridor.
• Increase effectiveness of naval task forces by decreasing assigned patrol area.

• Long Term (5+ years approx)
• Establish United Nations committee to develop economic and infrastructure development plan in Bosasso, Somalia.
• Establish United Nation resolution to instate peacekeeping ground forces in Somalia, beginning in Bossaso.
• Promote irrigation/agriculture as immediate industrial alternatives to piracy.
• Promote tourism in Bosasso as a safe coastal city.
• Eventual leveraging of natural gas resources to fund an active developing economy.

Our Project Takeaways were:

• Traditional product development tools are difficult to use in developing policy.
• Group deliberation is key to develop the most comprehensive policies.
• Iterative Pugh comparisons are crucial to develop optimal policies.
• Short term policies address symptoms, not root causes and are not sustainable.
• Long term policies should address root causes. While they may initially be ineffective, they are sustainable in the long term.

As I mentioned in the beginning of the post, if you believe these tools and others like it may be useful in your organization, perhaps I and my colleagues in MIT SDM are useful individuals for your team.

MIT SDM Article - An MBA or an MIT Master’s in Engineering and Management?

I have just been covered in an article in the MIT SDM Website!

An MBA or an MIT Master’s in Engineering and Management?

Wednesday, April 21, 2010

An MBA or an MIT Master’s in Engineering and Management?

By Charles V. Atencio, SDM ‘09

Almost mid-way through my engineering consulting career, I found myself wondering whether to pursue an MBA or a Master’s in Engineering and Management.

I had gone into engineering design after graduating with a B.S. in Mechanical Engineering, working mainly on infrastructure for pharmaceutical enterprises. At first, it was interesting—you have to understand the needs of the stakeholders and the business ecosystem—but after a while I realized that you never really owned your product. You designed it; you oversaw the construction, and then you turned it over to someone else. You were part of facilities and part of the operational budget, not strategic and definitely not viewed as adding value to the enterprise – which was what R&D did. And when I met with clients and asked questions such as, “How does this product contribute to your overall business strategy?” they weren’t really interested in hearing from me. Such issues were never considered part of the scope of the engineering consultant. Not content with this state of affairs, I decided to broaden my horizons.

I briefly considered pursuing an MBA, but didn’t want something so rigorously focused on profit margin. There is more to an enterprise and its organization than financial statements. To me, MBA schools are commoditized and, generally speaking, they concentrate primarily on the bottom line.

I wanted to leverage the fact that I’m an engineer and a technophile and integrate that with business. Then I found the System Design and Management (SDM) program, which allowed me to remain an engineer and still ask the big picture business questions. SDM opened new career options for me by bringing forward latent talents and now, after a year-and-a-half in the program, I can see myself working in one of two areas: product management or change management.

The System Design and Management program has also provided opportunities to further develop my leadership abilities. I have had many opportunities to help make a difference in SDM and the greater MIT community.

A good example of this was when I helped establish an SDM mentoring program for the MIT undergraduate students in the Gordon Engineering Leadership program. Leadership does not only entail “getting things done”, but also enabling others to realize their own potential. This skills of managing and leading others is crucial for SDM grads as they move forward in their careers towards executive level positions.

In terms of product management, the System Design and Management program has taught me to understand not only the needs of the engineers and researchers developing a technical product, but also the needs of those in finance and marketing. Engineers typically don’t focus on business strategy, and businesses don’t understand technical development. As an SDM graduate, I can connect the two and create a synergy between technology and business strategy in which the whole is greater than the sum of its parts. This is one way that an SDM is able to go “beyond the MBA”.

In terms of change management I could, for example, help a company with its acquisitions. Acquired assets all have their own IT systems, business processes, and organizational structures and you just can’t say, “Here’s your new platform; here’s your new organization,” and expect to get the integration and alignment you need to be successful. You need to manage the change and in order to do this you need people who understand IT systems, the organization, and the political and financial implications of changing them. MIT’s System Design and Management program has prepared me to do this.

Hiring an MBA to do either of the above could be tricky. In both situations, it’s important to hire someone who is capable of keeping up with the pace of technological change, who can interact effectively with the different cultures and agendas within an organization, and who can articulate the business case to all. If you don’t hire someone with the “big picture perspective” and the technological experience that SDM grads have, your company might miss out on a new wave of customers and end up playing catch-up, which is not a good place to be in today’s economy.

Save the Date! - MIT SDM Information Night - 27 April 2010

MIT SDM will be hosting an information night on the evening of 27 April 2010 from 6:00pm-9:00pm for anyone interested in learning more about the program. Attendees will also have the opportunity to speak to current students and alumni. I will be in attendance and a member of the student panel.

While an RSVP is not required, it is appreciated by the organizers.
RSVP Link
Directions

We look forward to your attendance!

A Preview of my MIT SDM Thesis

Be forewarned - This is a long post! 

Within a month I will be submitting my thesis, completing my requirements for a Master of Science degree in Engineering and Management at MIT.

I am at heart a technologist. Not only have I actively used technology throughout my life, but I always sought the individual "high" from finding innovative solutions to problems using technological products. This being said, I have felt right at home at MIT within the SDM program, surrounded by other true believers in the value of technology to innovative businesses and start ups. I'm even heading to New York City in a few hours for the first day of the Cloud Computing Expo.

The thesis topic would be considered unusual for an SDMer since it seems more appropriate for Harvard Kennedy School or Tufts Fletcher School for Diplomacy:

THE IMPACT AND POTENTIAL ROLE OF MULTINATIONAL CORPORATIONS IN ACHIEVING SUSTAINABILITY IN LATIN AMERICAN COUNTRIES

The Motivation
There is another side to my background, one that is not as readily apparent to acquaintances. I am the son of an engineer and nurse from Lima, Peru in South America. I was born and raised in the Boston area, but with a culture distinctly South American. Nevertheless, until I first visited Lima in 1999, after graduating from WPI, I had only visited Europe, never a developing nation. I was shocked by the level of contrasts between the upper middle class and poor that existed within the capital, Lima, and between Lima and its provinces, both of which had increased drastically in the past 50 years. Two questions tore at me for years:

• Why has this decay occurred?
• What could be done to reverse the process?

The Framework
While at SDM, I was introduced to the framework for sustainable development by Professor Nicholas Ashford in the MIT Technology and Policy Program. It aims to show how true holistic sustainable development towards national competitiveness must incorporate three interconnected core "pillars":

• Balanced Environmental Protection
• Economic Advancement
• Development and Protection of Workers

 What is new about this? Most literature on this subject only addresses one or maybe two of these issues and is typically rooted in the myopic perspective of a single discipline whether it be economics, environmental science, or organizational science. Only a systemic view of the issues involved can start to resolve this issue.

The Question
This topic as a general subject is far beyond a Master-level thesis or even a Doctoral dissertation. Accordingly, I decided to examine one focused question:

"How has automotive multinational companies (MNC) impacted these factors of sustainable development towards national competitveness in three countries: Argentina, Brazil, and Mexico?"

Automotive companies have been in Latin America for 90 years. If there is a positive impact towards development, we should certainly be able to notice it. The answer is not so simple.

In reality, there are mixed results from the evidence. In fact, automotive MNC activity has been closely tied to government policy and technology advancement, as shown in the causal loop diagram below.

Why the question marks? At different times, in different countries, under different circumstances, MNCs have either advanced, destroyed, or stagnated national development. The details are naturally covered in my thesis and are beyond the scope of this post! Rest assured, the conclusions are NOT reassuring and in fact are quite depressing. Nevertheless, they do serve as a first step in viewing issues of national development in a holistic way, forcing a new approach to solving these challenges.

Epilogue - The Beacon of Light - Technology Transfer
I have found that one of the most powerful tools towards national development is the concept of technology transfer, as illustrated with this loop:

Technology can serve as a valuable vehicle for the advancement of a developing nation. The most crucial barrier to it being realized is that the nation, or its infrastructure, economy, or people are not able to properly take advantage of it when presented. This concept is known as "apsorptive capacity". For instance:

"Would the population of a village benefit from the use of a computer if there is no electrical grid nor communication network?"

Suffice to say that this is an unusual, complex, but relevant thesis in the spirit of the MIT Engineering Systems Division, of which the SDM Program is a part.

'Nuff Said - Until Next Time

Charles Atencio's MIT SDM Curriculum - Summary

 Charles Atencio's MIT SDM Curriculum

  IAP 2009 (January)

SDM Core
ESD.34 - System Architecture (January Session)
Engineering Foundation
ESD.301 - Probability and Statistics
Management Foundation
15.381 - The Human Side of Technology

  Spring 2009 (February - May)

Engineering Foundation
ESD.72 - Engineering Risk Benefit Analysis
ESD.762 - Systems Optimization
Management Foundation
15.965 - Technology Strategy for SDM
15.969 - User-Centered Innovation in the Internet Age
Focus Areas
ESD.40 - Product Design and Development
ESD.802 - SDM Thesis Seminar
ESD.941 - Tiger Team (Elective)
15.980 - Organizing for Innovative Product Development (Elective)

  Summer 2009 (June - August)

SDM Core
ESD.33 - Systems Engineering
Engineering Foundation
ESD.763 - Operations and Supply Chain Management
Management Foundation
15.514 - Financial and Managerial Accounting
Focus Areas
ESD.74 - System Dynamics for Engineers (Elective)
ESD.940 - Managing from the Middle of the Organization (Elective)

  Fall 2009 (September - December)

SDM Core
ESD.34 - System Architecture
ESD.36 - System Project Management
Focus Areas
ESD.137 - Sustainability, Trade and the Environment (Elective)
ESD.930 - Leadership: The Missing Link (Elective)
15.569 - Leadership Lab: Leading Sustainable Systems - Classwork (Elective)
ESD.THG - SDM Thesis

  IAP 2010 (January)

Focus Areas
15.569 - Leadership Lab: Leading Sustainable Systems - Project (Elective)

  Spring 2010 (February - May)

Focus Areas
ESD.58 - Disruptive Technologies: Predator or Prey (Elective)
HAB.1230 - Corporate Strategy (Harvard Business School)
HAB.1263 - Executing Strategy (Harvard Business School)
ESD.THG - SDM Thesis

SDM Information Nights

The next SDM Information Night will be on Tuesday, 27 April from 6:00pm-9:30pm
MIT Sloan Faculty Club - MIT Sloan Building E52. I will be on the panel to answer questions.

From the questions I am asked at past SDM Information Nights, I know prospective students find the old posts from 1995 on Yoav Shapira (SDM'05) Blog enlightening. However, the curriculum had since changed since 1995. Besides, the basic SDM curriculum does not reflect the many electives from MIT, MIT Sloan, and Harvard Business School that I have had the chance to take. As you can see, I have been busy in the past year and a half!

MIT SDM Curriculum - Core Courses

MIT SDM Core Courses

These form the "heart" of the concepts that SDM covers in analysis, assessment, management, and system thinking. Almost all SDMers take these courses or courses that are designed as software development focused variations.

ESD.33 - Systems Engineering

How does an engineering team carry a project from concept, through engineering and construction, into successful validation and verification?

These are the types of questions that were asked at the beginning of the U.S. Space program. The complexities of such complex technological challenges led to the development of frameworks and processes to ensure successful development of products across multiple horizontal and vertical development teams. The modern methods and frameworks used in industry are presented in the course. The challenges of adopting Systems Engineering concepts to broader Systems Thinking applications is also covered.

My course team project involved the application of Systems Engineering processes to developing an effective international policy to mitigate Somali Piracy in the Gulf of Aden.

Pat Hale,

Director, System Design and Management Fellows Program
Senior Lecturer in Engineering Systems and former INCOSE president.

Pat Hale Profile

Pat's easy-going, open-minded nature lends him to not only teach the "hard-core" Systems Engineering concepts that he knows well, but also be open to the broader and harder to define region of System Engineering which is embodied in Systems Thinking as a whole. A mentor as well as a professor, he will often share the lessons he has learned "the hard way" in his career so that SDMers learn from his experience.

ESD.34 - System Architecture

How is a physical product or service structured to maximize delivery of value for all stakeholders? What are the interrelationships between a product's function and the form it should take? How do you reach a truly elegant design to meet this challenge?

One of the most challenging courses in the SDM curriculum, System Architecture is a true fusion of conceptual engineering, and elements of strategy, marketing, and philosophy. There is often no single "right" answer to a question in this course, but there certainly can be "wrong" ones!

My (2) team projects involved developing the value flow diagram for the Boston Big Dig to identify critical flaws in its architecture and a study of architecture optimization for digital cameras.

Prof. Edward Crawley,

Professor of Aeronautics and Astronautics and Engineering Systems
Ford Professor of Engineering

Prof. Edward Crawley Profile

It really takes a unique individual to teach such a challenging course as System Architecture. Prof. Crawley is one of the most purely brilliant individuals involved in the SDM curriculum. He will push all SDMers to their human limits. They will experience that learning at MIT is like "drinking from a fire hose"!

ESD.36 - System Project Management

How can we better optimize project planning and execution? The Project Management Institute (PMI) presents very basic frameworks to set-up, execute, and revise project scope, schedule, and costs. How do we go beyond this "superficial understanding" of project dynamics?

I have a Certificate in Applied Project Management (CAPM) from Boston University. The CAPM covers all the PMI theory required for the PMP. It is a very basic level of knowledge of project management. This reality is reflected in the fact that the Critical Path Method (CPM), cutting edge in the 1950s, is now obsolete but still widely used.

SPM goes far beyond what a CAPM covers. It presents the student with a series of tools, such as the use of Design Structure Matrices (DSM), probability distributions, and System Dynamics (SD) to more fully understand the apparent contradictions in project dynamics that appear when viewed through the simpler frameworks of PMI. 

My team project involved the study and evaluation of project management processes in use among open-source software development teams, focusing on Fedora operating system development.

Prof. Olivier de Weck,
Associate Professor of Aeronautics and Astronautics and Engineering Systems and Associate Director, Engineering Systems Division
Prof. Olivier de Weck Profile

A very level-headed fellow, he often openly asks his class, made up primarily of SDMers with an average of 9 years of industry experience, if they find fault or question the conclusions or frameworks he covers in class. SDMers are not the average graduate student; we have much more to share in the class. He recognizes this and leverages it to the benefit of all.

What Makes the MIT SDM Program Unique

Let me take a break from my thesis work to continue the discussion on this blog about the SDM program...

So what is SDM? What does it have to offer prospective students? What does its students and alumni have to offer employers?

In the words of Pat Hale, SDM's Program Director and former INCOSE (International Council on Systems Engineering) President: 

"SDM takes a 'total enterprise' approach that embraces a 'big-picture' view of the synergies within the entire organization, enabling students to become technologically grounded leaders." 

This is very true, but also offers too broad a perspective for many individuals from industry to truly understand.

With respect to Pat, let me propose a different approach on the issue that may be more salient to some. This has been the same perspective I have expressed in SDM Information Nights, given every 2-3 months at MIT and within the Boston area.

Almost everyone in any industry can identify with or has observed at least one of these types of comments in the "battleground" known as Corporate America from different individuals:

• "Engineers don't understand marketing!"
• "Engineers don't understand that we need to keep a budget or schedule!"
• "Marketing doesn't care if the product works!"
• "Why did upper management make that decision?"
• "Why do we need that feature in our product?"
• "How does that product or service fit into the overall company operations?"
• "Why is the company pursuing that strategy or technology or product?"
• ....and many others

Many people would suggest that simple communication would resolve these issues. While this may help, it does not address a fundamental issue. There are a variety of vastly different individuals, with very different professional backgrounds and perspectives that are often required to work together to ensure the success of an organization.

These differences of perspective lies at the heart of the challenge that many SDMers have when we describe our program to others from industry. It essentially involves in which "slot" SDM resides.

• Are you a future technical expert? Is it a technical degree, such as a Master of Science in Mechanical Engineering?

• Are you a future business leader? Is it a Master in Business Administration (MBA) such as from MIT Sloan or Harvard Business School?

• Are you simply adding to your current professional education/career path? Is it a mid-career program, such as the MIT Sloan Fellows?

The true answer to these questions is that SDM lies in the nexus of all three concepts, as conceptually shown in this Venn Diagram.

SDMers mostly, but not exclusively, come from engineering backgrounds. Many have been project managers and understand the needs of different types of stakeholders in a project. There are even some SDMers who already have MBAs.

The SDM program prepares individuals to synthesize innovative holistic solutions to the challenges facing a multitude of technical organizations. Its value is grounded on the concept that the whole is greater than the sum of its individual parts.

SDMers gain a new perspective to a technically-focused enterprise. This type of enterprise involves the interrelationships of the following:

• Product development and the interdependency of technical systems
• The architecture of technical systems / services and how they deliver value to ALL stakeholders in a business landscape
• The overall product strategy from the perspective of the business ecosystem and how it is influenced by and in turn influences overall corporate strategy
• The development of effective leadership AND management abilities in identifying and addressing broad stakeholder needs

This insight is one of the principle reasons why many SDMers have no intention to return to the natural progression of their previous careers. They see themselves as capable of achieving so much more than what a "slotted" engineering career may offer.

SDMers graduating from the program, including myself, often took towards the following types of positions that leverage such types of skills:

• Product Management
• Strategy
• Change Management
• System Architecture
• ...and many others...

How does the SDM curriculum contribute to this development of insight and perspective?

This is an interesting question... which I will deal with after I make more headway on my thesis!

Comments, Questions, and Debate are always welcome!

Until Next Time!