Designing Simulation-Based Learning
Environments: Helping People
Understand Complex Systems
A Workshop at the 2006 International Conference of the
System Dynamics Society, July 27, Nijmegen
Gary B. Hirsch
Consultant, Creator of Learning Environments
7 Highgate Road, Wayland, Massachusetts 01778 USA
GBHirsch@comcast.net
www.garybhirsch.com
1-508-653-0161
Overview
The Value of Simulators--Going Beyond Expert Model Building
Design Considerations--The Interface
— Principles
— Health Care Case Example
¢ Background
* Illustration of Design Principles for Interfaces
— Media Company Case Example
— Microfinance Example
Other Design Considerations
— The Model
— Learning Experience
Importance and Principles of Design from the Ground Up
“Watch Outs!” and Summary
Models...
Help Us
— Describe the Structure of Complex Systems
— Understand Relationship Between Structure and Behavior
— Ask “What if?” Questions Using a Consistent Framework
But It’s Hard to Convey Understanding of Complex Systems
Through Static Means Like Power Point Presentations; Interactive
Demos Are Better, But...
Much of the Learning Still Remains in the Head of the Model Builder
Managers Need a Means of Exploring the System Themselves and
Constructing Their Own Understanding
Simulators Utilize a Model, Interface, and Well-Thought Out Learning
Experience to Give Them This Capability
ea
Why a Simulator?--They Can:
¢ Engage Decision Makers and
Let Them Test and Deepen Their Understanding by
Experimenting with Their Own Strategies
Help to Convey Real Intuition About How the System Works
Enable Them to Understand of Strategic Implications of Their
Actions Including Unintended Consequences
Appreciate the Importance of Systemic Thinking--In General and
Especially About Their Own Problems
Develop Shared Understanding at Multiple Organizational
Levels
« Remove the Model Builder as a Middleman--lt’s Not Necessary to
Interpret “What the Model is Saying”
* Enable Experiential Learning Through a High Level of Engagement
Examples
Health Care Delivery and Community Health Status;
Dealing with Change in Health Systems
Newspapers Transitioning to the Internet
Microfinance Institutions
School Reform
Simulators for Teaching Physics and Economics
Port Operations and Effects of New Security Measures
Design Considerations--The Interface (1)
Allow for Gradual Introduction (e.g., by Using Pre-Configured
Strategies)--To Avoid
— Overwhelming Users with Choices
— Video Game Behavior
Consider Multiple Decision Sets with Different Choices
Modular Approach for Different Audiences or as Part of Gradual
Introduction
If Appropriate, Make Decision Making More Real-World By Having
Users Work Within Resource Constraints
Design Decision Making in Ways That Support Desired Lessons--
e.g., Role Playing to Show Consequences of Sub-optimizing,
Opportunities to Make Collaborative Decisions
Design Considerations--The Interface (2)
Maintain Context, Be Able to Go Up and Down Between Overview and
Detail
Present Data in Multiple
— Formats to Support Different Learning Styles
— Hierarchical Levels--Drill Down Capability
— Slices--System Components vs. Drivers of Performance Measures
Present Data in a Way That Lets Users Move Between Analyzing
Behavior in a Single Simulation and Comparing Among Simulations
Identify Set of Focal Variables That
— Together Give a Good Picture of the Health of the System
— Provide a Basis for Objective Setting
— Crystallize Comparisons Among Strategies
Design Considerations--The Interface (3)
Provide Information Support That’s Easy to Get At--Status
Reports, Help Screens; Avoid Manuals; Just-in-Time and On
Demand as Needed
Support Sensitivity Analyses to Help Learners
— Better Understand the Dynamics
— Not Get Hung Up on Whether Data is Right
— Identify the Few Parameters that It’s Important to Get Right
— Appreciate Need for Robust Strategies
Health Care Case Example--Background
Health Care Changing Rapidly in Mid-1990’s
— Payment Shifting from Fee-for-Service to Capitation
— Organization Structure Moving to Vertically Integrated Systems
— Greatly Increased Competition
— Horizontal Mergers
Managers Needed to Understand How to Manage Differently and a
“Practice Field” to Reduce Risk to Their Organizations
Overall Objectives--Improve:
— Understanding, Set Stage for Strategic Planning
— Strategic Thinking e.g., See the Importance of Making
Investments Over Time Rather Than Fire Fighting
— Systems Thinking Skills--Overcome Departmental Stovepipe
Mentality and Focus on Own Roles; Appreciate Big Picture
Opportunity to Shape New Ways of Working Together--Neutral Turf
Created by Hypothetical Situation
Health Care Case Example--Process
Consortium of About a Dozen Health Care Organizations, Diverse
Membership, but Shared Common Challenges
— Staffs and Stakeholders with Range of Backgrounds
— Pressure for Concentrated Experience
— Need for a Neutral Experience, Not Favor Particular Group
Each Member Sent Team of Six to Initial Meetings, Smaller Design
Team Later to Complete Development
Started with Open Process for Eliciting Ideas and Concerns
Early Prototyping Drew Rich Feedback Including Complete
Redesign of One Module
Learned Valuable “How Not-To’s”
Modular Design...Work with Subsystems or
Whole System
Health Care Delivery System
Care Delivery
Im provements a en
Nursing Homes
IS pecialty Care,
| msm cute Hospital 4
Primary Care and Outpatient
Sa —— Care
a Fi a | Home Care
—__ Demand for _—— jee
Care ——
ed ze
= Acute Illness > —
Preventive ss
Interventions 5
TRS
New —je-|Low Symptom |
Cases Chronic
Social Risk ag ~N
Chronic Illness
Maintenance
Socialand pa
Behavioral a Population Size. =
Interventions and Age Mix
Births ——________—_—-‘*
Subacute | ie Dependent
Chronic Chronic
Population, Iliness Rates, and Interventions
Pre-Configured Strategies Allow for Gradual Introduction
Health Care Delivery System
Year: 1997 Select Strategies for Comparison
Strategy: TEST Mode: Individual Provider
Click on a Strategy to load it: _
Loaded Strategies
| 1 DeNathina NOTE: — Onresults screens.
. you will see data for
9 2- Do Nothing Under Harsh Market Conditions
:
9 3- Insurer and Providers are Adversaries; Reduced Premiums 4. TEST
:
9 4- Insurer Collaborates with Providers by Absorbing Losses; Reduced
: Premiums % Wem
9 5- Individual Provider Best Efforts
:
3.
9 6- Individual Provider Best Efforts Plus Demand Management
és
9 7- Individual Provider Best Efforts Plus Premiums Set to Market 4.
:
9 8- Creation of Network Pool to Reallocate Funds Among Providers, Clear Strategies
. Premiums=Cost Plus 5%
9 9- Creation of Network Pool to Reallocate Funds and Make Network Investments;
. Premiums=Cost Plus 5%
See Comparisons Load and Unload
Decson Profle pee
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Role Playing Helps Teach Lessons About Collaboration
Health Care Deliyery System a fe)
Year: 1997 Core Decisions
Strategy: TEST Mode: Individual Provider
Select from the following:
Network-Level
Strategies <> Network
Primary Care
Roles/System Specialty Care
Components
Acute Care
Long Term Care
Home Care
Insurance Central Control
Each Role Makes Its Own Decisions Subject to
Health Care Delivery System
Year: 1997
Strategy: TEST
Resource Constraints
Specialty Care Decisions
Mode: Individual Provider
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Available to Invest (Estimate): $15.79 M
Proposed investnent: 3 0 <Previous | [ Decisions ] [ Next> ]
Resource
i Status Report | Central Control |
Constraint
Network Decisions Provide Opportunity for
Collaborative Strategies
Health Care Delivery System
Year: 1997
Strategy: INDIV3 Mode: Individual Provider
Netwoik tntoemiation Netwod Allocation
an
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Investment in Network Allocation
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| Copy Last Period ] [ 2 Help? ]
Available to Invest (Estimate): $ 0)
Prpciann seeanenen:®. 9 [ < Previous | [ Decisions ial Next> ]
Carefully Selected Performance Measures Give
Users Balanced View of Their Strategies
Health Care Delivery System
Year: 1997 Examine Model Overview
Strategy: INDIV3 Mode: Individual Provider
Performance
Measures
Decisions
Comparisons of Selected Variables Across Simulations
Let Users Identify Consequences of Strategies
Health Care Delivery System
Year: 1997 Compare Strategies
Strategy: INDIV3 Mode: Individual Provider
Graph for Network Patient Population
200,000
150,000
100,000 ~ al —
I a
.--—---——+ “tae,
|$=#---————| he
, a ee
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50,000 SS —_
o
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Time (yrs)
‘eework Patent Population -INDIVS Performance
‘Network Patient Population - TEST
Network Patient Population - INDIV1 M easu Fes
\
[ Population 47 | Eigicacy l | Youna Time ] | View Results
[ Cost per Capita rat Net Income a ] [ 2 Help ?
Users Can Then “Drill Down” to Understand Why
Strategies Produce the Results That Are Observed
Health Care Delivery System
Year: 1997
Strategy: INDIV3
EFFICACY OF
CARE
Mode: Individual Provider
Population
Cost per Capita
Performance
Measures
Decision
Support
a Component
| Primary Care Specialty Acute Care Long Term Home Care |
| 2 Help? , | Decision Profile See Comparisons
Select Strategies Central Control |]
Detailed Information Helps Explain Causes of
Behavior and Pinpoint Problems with Strategies
= =] a Results
Str Population + Mode: Individual Provider
%
200,000 Population
200
Cost per Capita
WamTING
Tes
x
=
i San EnaapEeEas
=< — Ff
Waiting Time
]
0
0
s
1997 2007
Time (yrs)
Effect of Waiting Time on Network Attractiveness (0-2: 1=neutral)
Effect of Premium on Network Attractiveness (0-2)
Effect of Efficacy of Care on Network Attractiveness (0-2) A
Effect of Continuaty of Gare on Network Attractiveness (02)
Network Population (0-200000 lives)
Cost per Capita per Month
| Network | [| Primarycare | | Specialty |] [_Acutecare =] [ — tonaterm | [Homecare | | Insurance |
| ? Help ? | [ Decision Profile ] [ See Comparisons | [ Select Strategies ] [ Central Control |
Health Care Deliver <
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Having Data in Multiple Formats Supports Different
Learning Styles
Health Care Delivery System
Near a Summary Statistics
Strategy: INDIV3 Mode: Individual Provider
1997 1999 2001 2003 2005 2007
Population Served 100,000 109,733 99,260 e8,110 49,224 4aatt
% Capitated 1 9.9e4 18.29 25.96 32.98 39.24
Network Market Share (%) 23.93 26.57 33.22 2270 1844 14.92
Cumutative Member Years o 220,365 431,581 899.779 712.109 805,536
# of Primary Care Physicians 40 37.95 29.66 18.53 10.39 5.404
Population per Physician 2.800 2881 3,369 a74a 2.792
# of Speciaity Care Physicians so 57.68 87.75 36.20 20.15
Population per Physician 1.668 1,902 1.728 1,262 2.223
# of Acute Care Beds 170 170 120 90 70 50
Average Acute Occupancy (%) 79.18 88.66 91.55 91.04 90.25 90.87
Outpatient Procedure Capacity 47,000 17.000 47,000 17,000 17.008 17.090
Outpatient Procedure Utilization (%) 33.99 98.99 99.39 79.43 58.72 48.14
# of Skilled Care Beds 80 so 80 80 BO 80
Average Skilled Bed Occupancy (%) 95.45 109 20.07 57.63 43.38 22.22
# of Intermediate Care Beds 700 100 100 100 100 100
Average Intermediate Occupancy (%) 93.79 98.99 71368 48:97 38.23 27.48
Home Care Annual Visit Capacity 55,200 2,407 45,115 37.244 30,795 25,518
Home Care Capacity Utilization (%) 91.30 108.61 73.51 58.00 20.00 40.33
Network Efficacy of Care 4.985 4.641 $481 4.436 4740 4952
Network Average Waiting Time/Norm 0155 1.387 1.831 2.122 2.127 3.331
Capitated Premium per Month 700 80 80 80 80 so
Competitor Capitated Premium 100 9417 ess 83.51 78.64 74.08
Fee for Service Premium per Month 135 140 410 +10 410 110
Competitor FFS Premium 135, 127.13 119.72 12.74 106.17 $9.98
Cost per Capita 112.92 110.08 11421 138.25 137.64 130.55
Total Provider Net Income 24.86M -4.020 M ANTIM -29.45M -22.22M -17.38M
Cumulative Provider Net Income 0 1912M 4488M -40.93M -98.00 M ~13788
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Status Reports and Help Screens Improve Ease of Use
Add/Subtract Primary Care Physicians Help Primary Care Decisions
Add/Subtract Primary Care Physicians (0-20 positions for physicians Mod Individual Provider
per 2-year period) This decision sets the number of funded 4 mary Care Status Report a“
positions. Investment of $35,000 per physician for recruiting. = “
etc. plus added operating costs for compensation, support costs. PRIMARY CARE — STATUS REPORT =]
etc. is required to add a position. These positions may be we
vacant if turnover is high. Physician turnover will go up when — Percent of Planned Investments Made 100
workload is high and net income for the practice is negative. | 2 CAPACITY
A reduction in positions is initially accomplished through —— Number of Physicians (1997=40) 40
attrition: if this does not produce the desired number, layoffs Percent Experienced 76.95
a = Ratio of Demand to Capacity 9230
. - _ Average Wait for New Visit (months) SOL
Starting number of pripfary care physicians = 40. [ne
— Population per Physician 2,500
. ] Informayon Systems | | PRIMARY CARE — FINANCIAL REPORT
Primary Care Revenue 21.81 M
| Primary Care Cost 19.17 M
‘ad $36 Primary Care Net Income 2.644 M
9\)7" NOTE: Only costs are reported f4r Network Manager strategies.
@ | Process Redesign
Capitated Payment to Primary Cre (pmpm) 12.5
fo Primary Care Cost per Capita Apmpn) 15.97
so 3h
Heian Primary Care Visit Rate 30
6 Primary Care Cost per Encodnter 78.83
@ | Management
EFFICACY OF CARE
Budock fo Cumulative Investment if Clinical Info Systems 0
3 $3k Efficacy of Care (0-10/ norm=5) 4.873
Average Length of Visits (minutes) 24.97
PRODUCTIVITY/COST UCTION
Relative CompensatyYon (ratio: 1l=market 1.
Turnover Rate (%) 12.07 Z
4) 3
Sufficient Funds?
Coby Last Period 2? Help?
Available to Invest (Estimate): $12.78 M
Proposed investment: $ 0 sprevious Decisions Next>
Status Report Central Control
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Sensitivity Analyses Let Users Change Assumptions and
Appreciate Need for Robust Strategies
Health Care Delivery System
Year: 1997 Assumption Choices
Strategy: INDIV3 Mode: Individual Provider
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Options:
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Media Company Example
Traditional Newspaper That Had Been Profitable, but Facing
Increasing Competition
Growing Online Operation That Functioned as a Separate
Business, Not Clear How Profitable It Would Be
Strategic Questions:
— How Much to Invest in Online Business
— Strategies for Achieving Critical Mass in Online
— How to Integrate Newspaper and Online to Create
Synergy; Function as a Media Enterprise Rather Than
Collection of Separate Businesses
— Strategies for Keeping Newspaper Profitable So That It
Can Serve as a “Cash Cow” for Investment in Online
Business
Media Company Simulator Presents Enterprise-Level
Results in Context of Causal Diagram
Newspaper Company Simulation
Year: 2000 ?Control Screen Help
Strategy: News-4
?How to Play? Enterprise Control
| ‘Newspaper Net Income
- ; 4 “a: .
— I ce ‘ Traditional Print
Newspaper Staff and Investment 40) 2M
409 ‘cl é Newspaper
xeompr — p_ Editorial Content and Quality
i]
i)
= =
Online Advertising and E Commerce Onl ine
rt nV
Business
eo 500|
Online Net Income’
ft 0
‘Traffic to Site"
-2M|
Quality of Experience"
Advance One Year Stop Simulation Go Back One Year
Enterprise Overview Enterprise Decisions Enterprise Results
Newspaper Control Online Control Compare Inputs
Alternative Overview at Enterprise Level
Newspaper Company Simulation
Newspaper Overview
Online Overview
Enterprise Control
Strategy: News-4c
Staff Overview
0 18 36 54 72 90 108
Time (Month)
Total Online Staff : News4e
Total Newspaper Professional Staff : News-4c
Total Enterprise Staff : News-4c
Circulation and Traffic Overview
i?) 18 36 54 72 90 108
Time (Month)
Total Traffic to Site : News-4c
Total Weekly Circulation - News-4c
Financial Overview
ie} 18 36 54 72 90 108
Time (Month)
Online Net Income - News4e
Newspaper Operating Income - News-4c
Enterprise Net Income - News4c
Advertising and Commerce Overview
0 18 36 54 72 90 108
Time (Month)
Paid Impressions - News-4c
Online Transactions - News~4c
Display Advertising Content - News-4c
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More Detailed Overview is Provided for Each
Business--Traditional Print Newspaper...
Newspaper Company Simulation
Year: 2000 2Newspaper Control Screen Help? ||_?How to Play? | Newspaper Control
Strategy: News-4
Performance
Invest in Eait Syst
5M
0
Advance One Year Stop Simulation Go Back One Year
Newspaper Overview Compare Inats Change Assumptions
Enterprise Control Onljxé Control
Decisions
...and New Online Business
Newspaper Company Simulation
Year: 2000 [_2Online Control Screen Help? | [?HowtoPiay?| Online Control
Strategy: Online-2
nig” Cnee conieaneg Content’
—
Offerings to Users 20,000}
and Depth of
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(= |
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1M
1
—
Time Allocation
ity i ,
Quality of iaperence
ence
line Vendors'~—j Total Traffic
es
Totat Trafic to 5
C100 mI
OLY
Total Ontine Cost
2M
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Advanca\On Year/ Stop Simulation Go Back One Year
Online Odprliew/ Compare Inputs Change Assumptions
Enterprise Chirp Newspaper Control
Decisions
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Buttons on Overview Screens Take Users to
More Detailed Views of Causal Structure,
Newspaper Company Simulation
Year: 2000 Compare Strategies for Newspaper
Strategy: News-4
Fraction of ri spaper in Color
Product Flexibility’ a ed V; mA of New sn
Productivity of ew, Staff Sey to Advertising Ratio’
Average Age of Presses'
sg = or Content’ Display Advertising fa.
Maximum Size of Paper Desired Fraction Editorial’
Hiring els a
Investment in New Pressesy
Retirement of Presses'
Jumber cae Extra Secti
Satine ie
sign and Systems'
Investment in
Decisions Lo mec
Measure
[ Sees me | | Hathzxecthinc ae | [ Brees Sees ] Decisions Detailed Results
Total Cost Circulation Revenue ] [ Display Ad Revenue
[ Metro Circulation | [ nationatcircutation | | Display Advertising | Seas Saokouaees
[ Editorial Cost ] [ Circulation Cost ] [ Production Cost ] Comparison
Behavior of Other Variables That Affect Key Measures,
Newspaper (
Company Simulation
Year: 2000
Strategy: News-4
Compare Strategies Help
Compare Strategies for Meme
Perceived Value
6
8,000
2
1
e ke aa ——__|
6,000
15
05
2
4,000
1 al
ie}
0 6 12 18 24 30 36 42 48 54 60 66 72 78 84 90 96 102 108 114 120
Time (Month)
Perceived Value of Newspaper : News-4
Editorial Content : News-4
Editorial Productivity
Editorial to Advertising Ratio : News-4
Operating Income Perceived Value Brand Image Beciauae Detailed Results
Total Cost Circulation Revenue Display Ad Revenue
Causal Factors Select Strategies
Metro Circulation National Circulation Display Advertising
Editorial Cost Circulation Cost Production Cost Comparison Central Control
Newspaper
...and Decision Screens
Year: 2000
Strategy: Online-2
Newspaper Promotion, Pricing & Content Decisions
Metro Subscription
oe]
Price {$ per Week}
10
Netionsl Subscription
? Price ($ per Week)
Metro Subscriber
oo)
Promotion
($ per Year)
8
National Subscriber
Le)
Promotion
(3 per Year)
8
Number of Extrs
oo)
Sections
(Sections per Week)
Metro Newspaper
= es
a
National Newspaper
2) sin | oe
o 2
Display Advertising
? ee i |
© | Rates (S per inch)
o 200
Metro Promotions
ie
so s1om
National Promotions
2 | orev Ls
30 S10M
> Marketing Expenditures
. _ 7ST
so 10M
Detailed Results Advance One Year
Investment Decisions Central Control
Hiring and Training Sufficient Funds?
Desired Fraction
oo]
Editoris!
{Fraction of Content)
Enterprise Allocation to Newspaper: $
Newspaper Budget Available: $
Proposed Newspaper Budget: $
5.420 M
135.51 M
97.98 M
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Microfinance Case Example
¢ Simulator developed for Harvard’s Kennedy
School of Government for training both graduate
students and practicing MFI managers
* Strategic Questions Addressed by Simulator
Right focus given population in market and its needs
Product design (mix of rates terms, policies) that meets
populations needs and MFI goals and assures MFI’s
survival and ability to grow
How fast to grow in terms of branches, staff, etc.
Product mix--e.g., whether or not to accept savings
deposits
Mix of external sources of funds
Hierarchy of Decisions: First Select Overall Strategy
Vensim Application Environment
KSG Micro Finance Institutions Management Simulator
Initial
Creating the Strategy for Your MFI
Decisions: First Select the Target Market
Means Testing to Select Income Groups
(Unchecking Box Selects Women Only) (If unchecked, market will determine income)
profile of borrowers.)
Lending to New or Existing Businesses
© New Businesses Only If checked, also check the income groups below
© Existing Businesses Only to be included in the target market.
© Both New and Existing Businesses T $200 Lowest Quintile
© $ 400
Nature of Loans Being Granted - $ 500 Middle Quintile
© Agriculture - $ 700
© Trade © $2700 Highest Quintile
(Amounts shown are median income for
Scenario Switches each quintile.)
C4 (2ar2b 3 C4
Use Scenario from Spreadsheet Control Results Advance Simulation
Then Make Your First Set of Decisions About
Target Market
Loan Design || Staff/Productivity || Info Syst and Savings || Sources of Funds
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Then Fine Tune Strategy with Decisions About
Product Mix, Growth, Sources of Funds, Etc.
KSG Micro Finance Institutions Management Simulator
Initial Creating the Strategy for Your MFI
Decisions: Design the Loan Product You Will Offer
Offer Group vs. Individual Loans? Frequency of Payment - Collateral Required?
© Individual Only «© Monthly AE 1 Savi 5
© Groups Only - Weekly ompulsory savings?
© Both Individual and Group Loans © Every Six Months Monthly Interest Rate Paid
Commission Rate on Compulsory Savings
Loan Amounts?
a ; es es
ao [225 ] 1000] First Stage a ie 10 0 | 10
Monthly Interest Rate _
eS sc cond Stage Interest Calculation
o__ 1450 } 1500 a * Straight Interest
4 0 10
o__ [900 T-gona | SS Built-In Late Payment Penalty Lapeckning eatance
Term of Loans (Months) _—
ee ee
(Expressed as percentage of interest rate.)
1 12 36.
Control Results Advance Simulation
Other Decisions
Loan Design
| Target Market | | Staff/Productivity | | Info Syst and Savings | [| Sources of Funds |
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For Results, Users Can Drill Down from High Level Such
as P&L to Understand Reasons for MFI Performance
Vensim Application Environment
KSG Micro Finance Institutions Management Simulator
Final Tracking MFI Performance
Results: Profit and Loss Statement Revenue and Expense
Revenues 8,000
Loan Interest 5337
6.000
Commissions and Other Fees 435
4,000
Interest on Invested Funds 471
Expenses Total 6243 2,000
Salaries 843 0
0 12 24 36 48 60 72 84 96
Non-Salary Overhead 422 Time (Month)
Loan Losses 846 Revenme: test
Expense : test
Interest Paid to Funders 1443
Interest Credited to Savings 0 Netincame: 2589
Total 3553 ;
New Simulation | Balance Snect
Other Results
[Revenue | [ Applicants and Borrowers | [ Expense and Staffing | [ Loan Loss |
[ Savings and Funding |
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For Example, The Components of Revenue...
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KSG Micro Finance Institutions Management Simulator
Final Tracking MFI Performance Load/Unload Runs
Results: Revenues
First Stage Second Stage Third Stage Total
Group $ 836 1346 1425 3607
Individual $ 499 812 862 2174
iota $ 1335 2158 2287 5781
Average Payments
Principal 19 38 75
Interest 2 5 10
Total 21 42 85
| Components of Revenue| [Total Revenue] [ Stage 1| [Stage2] [Stage3]
Drivers of Revenue: _| Total Borrowers] [Revenue per Borrower] [| Loss Rate |
New Simulation |
Other Results [ Back to P+L | | Changes in Borrowers |
Revenue
[| Applicants and Borrowers | [ Expense and Staffing | | Loan Loss | [ Savings and Funding |
—: using
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...and Factors That Drive Total Revenue
Yensim Application Environment
KSG Micro Finance Institutions Management Simulator
- Seis <|| Performance Load/Unload Runs
Borrowers Gem Ta) Revenue perBorower EG
2.000 Revenue per Borrower
Seco ,, al
1,000
1 7
125
° 8 4
o 12 24 36 48 60 72 84 96
Time (Month) ° L
Total Borrowers : test 2 0 12 24 #36 48 60 72 84 96
Total Borrowers : newtest!, ——————————. Time (Month)
Revenue per Borrower - test
fot) OveraliLossrate CE 3 Revenue per Borrower - newtest
Overall Loss rate 5 10
0.02
~ 42 85
0.01
Com nue] [Stage 1] [ Stage 2 | | Stage 3]
0
0 i2 24 36 48 60 72 84 96 pwers| | Revenue per Borrower| | Loss Rate |
Time (Month)
Overall Loss Rate -test ——____-s ew Simulation
ini Other Results | Back to P+L | | Changes in Borrowers |
Revenue
| Applicants and Borrowers | | Expense and Staffing | | Loan Loss | | Savings and Funding |
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Ability to Output to Spreadsheet Gives the Greatest
Detail and Option of Further Analysis
Revenue
Revenue YTD
Revenue Cumulative
Revenue per Borrower
Loan Interest Paid Over Term of Loan
Loan Interest Paid Over Term of Loan YTD
Loan Interest Paid Over Term of Loan Cumulative
Interest Income on Unborrowed Funds
Interest Income on Unborrowed Funds YTD
Interest Income on Unborrowed Funds Cumulative
Commission Income
Prepaid Late Payment Penalty Payments
Total Fees Paid
Total Fees Paid YTD
Total Fees Paid Cumulative
First Stage Group Revenue
Second Stage Group Revenue
Third Stage Group Revenue
First Stage Individual Revenue
Second Stage Individual Revenue
Third Stage Individual Revenue
Expense
0
sh — sh — se — eS — i — Te — Se — Te — ee —
1162.
B\S\8
AHF oHOC oO BBA S
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0
0
0
0
0
11
0
507 559
2,598 3,128
2,598 3,128
3 3
442 490
2,101, 2,563
2,101 2,563
0 0
0 0
0 0
6 69
0 0
6 69
497 565
497 565
289 312
26 36
0 0
1B 187
16 21
0 0
125.303, 1271.604, 1308.904 1343.357, 1377.415 1411.671) 1446.998 1480.104 151.504) 1546.341, 1578.653
ea
Design Considerations--The Model (1)
Maintain Right Level of Detail, Resist Pressure for More--
Keep Balance Among Issues, Sectors, Stakeholders
Have Enough (Dynamic) Complexity--People Need to
Recognize Their World
Make Certain That Model Can Replicate Key Reference
Modes
Use a Modular Structure If Possible--Be Able to Deal with
Smaller Parts of the Problem and Then Combine to Look at
Entire System
Do Extensive Testing to Avoid Misleading Results
Design Considerations--The Model (2)
¢ Validation Standard Should Be Robustness, Plausible
Behavior Under a Variety of Conditions
¢ Validity is in Having Some Confidence in Comparative
Results, That the Model is a Consistent Test-bed for
Strategy
« People Need to Be Sold on the Idea That No Model is Really
“Right”, The Model’s Value as a Thinking Tool
Design Considerations--The Learning Experience (1)
¢ Keep Introduction Short
— Why a Systemic View? Use Simple Example
— Case Material
— Brief Outline of Day
¢ Get “Hands On” Quickly
— Make the “Tour” Interactive
— Use Pre-configured Strategies to Practice the Desired Way of
Thinking
¢ Anticipate Behavior
¢ Articulate Hypotheses
¢ Use Results to Understand What Happened, Especially
Surprises
— Group Debrief, Facilitation to Share Learning
Design Considerations--The Learning Experience (2)
¢ Free Play to Craft and Test Broader Set of Strategies; Allow Open
Choice of Strategy or Use Pre-Configured Strategy as Starting Point
« Make Time for Multiple Iterations, Periodic Debriefings, Sensitivity
Analyses
¢ Multiple Modes of Play for Different Audiences--Make It Possible to Do
Something Useful in Shorter Time Period
« Discuss Application Back to Organization--Implications for:
— Learning Needs
— Strategy
— Data
« Make Embedded Archetypes Explicit; Provide Archetypes and
Templates as “Take-Away’s” for Immediate Application
Design from the Ground Up (1)
* Ifthe Objective is to Improve the Thinking of Decision Makers--
Start by Getting Inside Their Heads
— What Are Their Needs, Concerns?
— What Are the Short- and Long-term Decisions Facing Them?
— What Are Their Mental Models?
¢ Where Do Their Mental Models Fall Short?
— Laundry List Thinking; Lack of Systemic Context
— Poor Sense of Second Order Effects
— Perils That Need to Surface--Where Can Strategies Make
Things Worse
— “We vs. They” Thinking--Accidental Adversaries
— Failure to See That Multiple Interventions Are Required for
Effective Strategy; Emphasis on Single “Magic Bullet”
— Potential Conflicts Among Objectives
— Focus on Fire-fighting Instead of Long-Term
Design from the Ground Up (2)
Develop Clear Learning Objectives
Model Boundary and Structure Should Focus on the Elements
Needed to Produce These Lessons; Not Try to Capture All the
Detail in Real World
Have Client Help Identify Structure--Part of Their Learning Process
Be Open to What Might Be Learned from Modeling as Well as
Original Learning Objectives
Process with Multiple Checkpoints and Mid-Course Corrections
Anticipate Ongoing Uses--e.g., Strategic Planning, Staff
Development, Links to MIS, Detailed Planning and Budgeting
Tools--and Build Into Design
Design from the Ground Up (3)
Design and Development Should Have Multiple Rounds of
Interaction with Client(s) and Range of Stakeholders
Early Opportunities for Model Builder to Feed Back and Test
Impressions, Group Model Building Techniques May Help
Early Testing of Prototypes
— Realistic?
— Useful?
— Does Interface Design Support or Get in the Way of Learning?
Design Team
— Include Range of Experience and Points-of-View
— Workable Size
— Draw on Wider Range of Inputs at Selected Points
Design from the Ground Up (4)
Provide Sufficient On Screen and Written Documentation;
Guidelines for Facilitators
Build In Evaluation
— Questionnaires
— Focus Groups
— Debrief Pre- and Post- Mental Models, Can Participants
Articulate What They’ve Learned?
Periodic Revisions to Incorporate Lessons Learned
Watch Outs!
Pressure for More Detail--Until the Model is Too Complex to Be
Useful
Event Rather Than Policy Orientation (e.g. short-term crisis)
Based on Client’s Past Experience with Simulation
Where Did You Get Your Data? How Do You Know the Model is
Right?
Interesting, but Not Our Company, Agency, Hospital, etc.
Great Off-site Exercise, but Same Monday Morning Behavior
Pet Ideas That People Want Reflected in the Model
Summary
Who Are the Client(s), Decision Maker(s), Stakeholder(s)?
What Are Their
— Problems?
— Needs for Deeper Understanding?
— Options for Taking Action?
What is the Minimal Model for:
— Addressing Their Concerns
— Asking “What If?” Questions About the Range of Options Open
to Them?
What Kind of Learning Experience Will Let Them Explore Their
Options and, In the Process, Understand the System They Are
Managing?
More Examples and Information at:
www.garybhirsch.com
