By John Sterman

Irwin McGraw-Hill, 2000

982 pages, $109

The current energy crisis in California is a reminder that strategists and policy makers are notoriously inept at understanding how complex systems function. As children we learn best in simple, linear, small-scale contexts where a hand on a hot plate produce immediate, specific feedback. Change the scale, introduce a variety of actors and interdependencies, add feedback delays and the non-linear complexity that emerges baffles us. Our typical response is to default to simple rules-of-thumb as learning about cause and effect becomes impossible. And in that process we often make things worse, for our intuitive answers to complex questions are almost invariably wrong – today’s solution turns out to be tomorrow’s problem. As John Sterman, J. Spencer Standish Professor of Management at the Sloan School of Management at M.I.T. points out, however, with the development of the computer and the discipline of systems dynamics, there is now some hope. His book is a magisterial tour-de-force that may well become the bible of the field. Computing allows us to model complex systems, reducing their scale in space and time so that we can run multiple simulations to show the effects of our actions. They are not magic bullets but aids to effective decisions. Sterman writes in an engaging style and uses fresh, interesting examples. The reader gets the feeling that he is always on your side, emphasizing the approximate and tentative nature of all simulations and their benefits to thinking and dialogue rather than their mathematical rigor. For the serious user, all the mathematics are there and the simulations come on a CD in three different modeling formats (Vensim, Powersim and Ithink). If you have any interest in systems dynamics this book is an essential reference.