Federico Barnabè

A “system dynamics‐based Balanced Scorecard” to support strategic decision making: Insights from a case study

Purpose – This paper aims to focus on the development of a “dynamic Balanced Scorecard” and to demonstrate that matching the traditional Balanced Scorecard (BSC) architecture with system dynamics principles offers better support for strategic management decisions.Design/methodology/approach – The paper is based on a case study related to a service‐based business. The maps, the mathematical model and the BSC developed according to system dynamics modelling principles are discussed.Findings – A system dynamics‐based BSC, particularly if embedded into a management flight simulator, would allow exploration and understanding of features of complexity and dynamics, consideration of feedback loops rather than unidirectional causality, the use of mapping tools for a more comprehensive design of the strategy maps, the facilitation of a process of organisational learning; and support for policy design and strategic analysis performed by managers.Originality/value – The value of this paper is two‐fold: first, it sho...

The causal relationships between performance drivers and outcomes

Purpose – The purpose of this paper is to speculate on the potentials of the system dynamics methodology to contribute to the balanced scorecard (BSC) design and implementation by producing a detailed causal relationships model that links strategic and operational objectives in a more accurate and effective way.Design/methodology/approach – The work is based on the methodological principles and the operational tools provided by the system dynamics methodology and the BSC framework.Findings – One of the main areas that both the relevant literature and Kaplan and Norton identified as critical in developing the original BSC framework is related to the identification and the quantification of “causal relationships” across the BSC, and to the subsequent opportunity to use a mathematical‐computer model to test and simulate such assumptions and their impacts on strategy implementation. Such issues are addressed in this paper.Practical implications – The paper provides information and consideration on how to mode...

Microworld Development

The article presents the outcomes of a group model-building project at a chemical company that produces calcium carbide. The project led not only to the creation of a system dynamics model describing the production process but also to a microworld, a computer-based interactive learning environment meant to reproduce most of the features of the operating and controlling software actually used in the company. The process of organizational learning, the gaining of a better common understanding of the production process, and the development of the different mental models of the plant operators were some of the projects main goals. Moreover, the method followed during the project can be considered as general and can be used mainly in a variety of production processes in most manufacturing industrial firms both for the modeling of production processes and for teaching and training the operators who manage such systems.

“Integrating” Business Model and Strategy

This chapter explores the potential role of Integrated Reporting in supporting the relationships between a company’s strategy and the development (i.e. design and implementation) of its business model. To this aim, we draw on the relevant literature on strategy and on business models, as well as on the recent guidelines provided by the International Integrated Reporting Council framework, to suggest a three step process for linking the company’s strategy to the development of the related business model. An example of such process is presented in the context of low-cost airline companies.

Managerial Myopia in Mismanaging Renewable Resources

Background. Previous research demonstrates three main causes for frequent cases of overexploitation of renewable resources: open access, provision problem and misperception of dynamics. Aim. The aim of this study is to explore the role of a fourth factor for overexploitation of renewable resources, managerial myopia (also referred to as short-termism), as well as to further explore the role of mental models, personal heuristics and group dynamics in mismanagement of renewable resources. Method. For this purpose, the study adopts an experimental design using a System Dynamics (SD)-based Interactive Learning Environment (ILE). The SD-ILE offers sufficient information to the players who are instructed to operate in an oligopoly situation where open access is excluded. Findings. Managerial myopia seems to be a relevant factor in pushing players to develop short-term, over-aggressive policies. The simulations show that optimal or sufficient policies are rejected by players, even when correctly identified, due to perverse incentives generated by short-term accounting goals. A feasible solution for myopic behavior is identified and tested: measuring a larger, balanced set of performance indicators on which managers develop their strategies. Conclusions. The experiment shows that significant improvements in performance and mitigation of myopic behavior are possible. It also demonstrates the relevant role that SD-ILEs may play in studying renewable resource issues and assisting decision-makers in developing and implementing coherent policies.

Practicing Lean Strategy: Hoshin Kanri and X-Matrix in a Healthcare-centered Simulation

Purpose This paper builds on the debate regarding the application of Lean strategy principles and tools in modern organizations, specifically focusing on the healthcare (HC) sector. The purpose of this paper is threefold: first, to highlight the potential role played by Lean strategy tools for strategic planning and management, particularly in reference to the Hoshin Kanri policy deployment system and the “focus, alignment, integration, and review” (FAIR) method; second, to discuss how Lean strategy can be operationalized, specifically relying on the X-Matrix reporting tool; and third, to explore how simulation techniques, in the form of role-playing (RP), may support the aforementioned operationalization of Lean strategy while at the same time promoting policymaking and knowledge sharing. Design/methodology/approach This research adopts a case study approach. Specifically, the paper relies on the use of a RP Lean strategy project developed in a HC setting. Findings The paper highlights the potential for the Hoshin Kanri policy deployment process in HC, also emphasizing the main strengths of X-Matrix reporting and the usefulness of the RP technique to support learning acquisition and decision making. Practical implications The paper demonstrates how a Lean strategy simulation project may be effectively used for strategic planning/management and to train professionals in HC. To achieve these aims, a methodology to design and implement simulation-based Lean strategy projects in HC is presented and discussed. Originality/value A review of the academic literature indicates that Lean strategy is still an emerging research topic addressed by only a limited number of articles. The paper contributes to a deeper understanding of the fundamentals of Lean strategy (particularly Hoshin Kanri and X-Matrix) with particular reference to the HC sector.

Engaging professionals with serious games: the Lean Healthcare Lab at Siena University Hospital

Purpose This paper aims to stimulate interest in the potentials of serious games within organizations. Through the examination of a case study, emphasis is given to serious games designed for health care (HC) organizations that are adopting lean thinking principles and tools. Design/methodology/approach The paper discusses how serious games can be designed and implemented in practice by describing a case study based on a HC organization. The program, now in its second year, has been used extensively to train HC professionals. Findings The article is based on the authors’ firsthand experience with serious games and the outcome of several projects carried out in the HC setting under analysis. Serious games were found to be powerful training and management development tools as well as engaging environments for professionals. Specifically, The Lean Healthcare Lab supported professionals in their use and implementation of several Lean principles and techniques. Research limitations/implications The article suggests the opportunity to evaluate the effectiveness of serious games also to improve team performance and develop leadership skills. Practical implications Serious games have an enormous potential in sustaining processes of both individual and organizational learning, as well as facilitating improved teamwork. Moreover, serious games are very effective educational tools when compared to more conventional programs. Originality/value The approach described in this study can be used to design and implement serious games in any type of organization, in particular, those employing highly skilled professionals. Additionally, this article highlights how serious games can provide learners with a simulated close-to-reality environment where they are challenged to develop policies and use a variety of Lean and management tools.