Computer Simulation Lessons Learned

In previous postings, the names Kahneman and Smith have been referenced – Daniel and Vernon, respectively. Jointly, they won the Nobel Prize in economics (2002); although, their work was conducted separately. http://nobelprize.org/nobel_prizes/economics/laureates/2002/index.html .

In the case of Kanneman, the award was “for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty,” and for Smith “for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms.”

Both focused on investor psychology and the use of simulations to study investor and market behavior, response to new information, reactions to uncertainty, and the speed with which markets achieve equilibrium.

I mention this because the use of simulations may strike some as fundamentally different than fully competitive markets, but the research was validated as accurately mirroring typical market responses under an assortment of scenarios.

Why mention it here? Well, I use a computer simulation with my marketing class, and, yesterday, the four competing teams gave their end-of-semester “lessons learned” presentations. As usual, the results were interesting, and I thought you might be interested in some of the more significant realizations.

The Strategic Helix of CQI — Sherika Hill

As time permits, I am posting final exam papers written by selected students of mine (with their consent, of course). In each case, they have addressed the question of whether the tools and techniques of continuous quality improvement work in healthcare settings. This seemingly simple question is abundantly difficult. My students, however, are brilliant, and I am frequently rewarded with “mind candy” such as that provided by Sherika Hill, who posits that the continuous improvement of Shewhart’s and Deming’s PDCA cycle is not necessitated by perfection’s impossibility but, instead, by the changing forces and influences of the informing environment.

Is It Time to Stick Your Head Out Of the Office?

When I was a lieutenant in the military, we were told that no other combat arms position is more dangerous when riding around in a tracked vehicle. The reason is that the lieutenant is the “track commander.” Now, the track commander is in constant communication with the driver, and the track commander reads the map, gives the driver directions, and is responsible for the tactical decision-making for that vehicle (which may have as many as six or seven other soldiers/lives inside). To do all of this (especially, the tactical decision-making), the lieutenant has to stick his head outside of the track. This is necessary to see the terrain, the other vehicles in the convoy, and, unfortunately, the enemy. The head of the lieutenant, sticking out just above the top of the track, therefore, is akin to the Apple sitting on top of the son of William Tell, and the lieutenant’s head is a tasty target for the enemy.

This ability to survey the battlefield and acquire the information it provides is known as “situational awareness.” It is situational awareness that prompted George Patton, even as a three-star general, to lead from the front. And, it is why senior leadership in any organization needs to spend more time at the front lines than in meetings and in the board room. In fact, when we were in Garrison and I was a section leader, I didn’t have a desk to speak of. Five of us shared a single desk, with each of us getting one drawer. When we complained, we were told that, if we didn’t like it, we could simply head off to our offices — to which we responded, “what office?” The answer was “the motor pool.” That, we were told, was our place of duty — at the front lines, in the company of those we were privileged to lead.

“Tragedy” of Coverage for Preventative Medicine

The common churning of patients/customers between insurance companies every few years suggest that coverage of preventative medicine services is unlikely to render a benefit to the original payor. This becomes all the more problematic when realizing that most of the benefit of preventative medicine is likely to occur once the patient is of retirement age and covered by Medicare. As mentioned earlier with the Blue Cross Blue Shield description, this is changing but, like everything in healthcare, at an abysmally slow pace. Personally, I think that the likely model explaining this slow adoption is Garrett Harden’s “Tragedy of the Commons.”