In this Sloanies Talking with Sloanies episode, host Christopher Reichert, MOT ’04, interviews Nelson Repenning, PhD ’96, (School of Management Distinguished Professor of System Dynamics and Organization Studies) about his 2025 book There's Got to Be a Better Way, co-authored with Donald Kieffer (Senior Lecturer, System Dynamics). A system dynamics expert who started at MIT as a PhD candidate at 23 and now directs the MIT Leadership Center, Repenning's research probes why organizations ignore proven tools, from lean methods to safety protocols in industries like oil and gas. The book's thesis: static plans (strategies, budgets) clash with rapid change, spawning "firefighting" via ad-hoc fixes that stifles long-term productivity.
Repenning tackles buy-in hurdles for invisible wins, like safety where "nobody gets credit for defects that never happened," especially in high-risk sectors with delayed feedback. For middle managers, he champions "dynamic work design"—tackling small, quick experiments on pain points to yield fast results and organic spread, as seen in Harley-Davidson's backlog fixes and the Broad Institute's 2020 COVID pivot, favoring iterative problem-solving over rigid control.
He stresses cultural tools like the "human chain" for face-to-face ambiguity resolution amid email overload, linking it to return-to-office trends for mentorship. Reflecting on his 1990s spark questioning tool adoption, Repenning notes system dynamics' mainstream rise at Sloan amid AI's black boxes. Advice for students: embrace MIT's low-structure entrepreneurialism and diverse programs expanded his mindset beyond technical expertise to create meaningful societal impact.
Sloanies Talking with Sloanies is a conversational podcast with alumni and faculty about the MIT Sloan experience and how it influences what they’re doing today. Subscribe and listen on Apple Podcasts, Spotify, or wherever you get your podcasts.
Episode Transcript
Christopher Reichert: Welcome to Sloanies talking with Sloanies. A candid conversation with alumni and faculty about the MIT Sloan experience and how it influences what they're doing today. So, what does it mean to be a Sloanie? Over the course of this podcast, you'll hear from guests who are making a difference in their community, including our own very important one here at Sloan.
Christopher Reichert: Hi, I'm your host, Christopher Reichert, and welcome to Sloanies talking with Sloanies. My guest today is Doctor and Professor Nelson Repenning. Welcome, Professor Repenning.
Nelson Repenning: Thanks for having me. Good to be here.
Christopher Reichert: Great to have you here. So, before we begin our conversation, let me give our listeners some background about you. So, Professor Repenning is the School of Management Distinguished professor of system dynamics and organization studies at MIT Sloan School of Management. He's focused on understanding why organizations often fail to implement well-established tools and practices.
He arrived at MIT at the age of twenty-three and worked with the legendary Jay Forrester in the early days of the science of system dynamics, and worked, and works, I believe, with John Sterman, another beloved professor here at Sloan. He serves as the faculty director of the MIT Leadership Center and holds a B.A. in economics from Colorado College and a PhD in Operations and Management and System Dynamics from here at MIT. Over the last twenty years, his research focuses on why organizations struggle to implement effective tools and practices, which has led to the development of dynamic work design, a framework for improving productivity and management.
Professor Repenning has worked across various industries including manufacturing, biotech, oil and gas, and has investigated major industrial accidents so we can cover some of the ones that you talked about in your book. Speaking of which, which was released in late August of 2025 he is a co-author of There's Got to Be a Better Way How to Deliver Results and Get Rid of the Stuff That Gets in the Way of Real Work and finally has received awards including the International System Dynamics Society's Jay Wright Forrester Award and the Jameson Prize for Excellence in Teaching.
So, did I miss anything you want to add?
Nelson Repenning: No. That's plenty, thank you.
Christopher Reichert: Well, I have a question for you. Have you been able to close your golfing handicap with your mother or how close have you gotten?
Nelson Repenning: Uh, I think I'm staying about the same. And she is aging a little bit. So, I think Father Time is probably my biggest ally here, but, uh, she's a fabulous golfer, so I can just barely hold my own if I focus and practice a little bit.
Christopher Reichert: And can I say on a personal note, when I served on the Sloan Alumni Board, you used to open our sessions with a brief talk about leadership and the leadership center, the challenges, the pitfalls and the insights. And obviously, a lot of the work you did kind of informed what you told us, but it was a great way at the time to bring this disparate, disparate group of alumni into focus. It kind of settled the herd, so to speak. And, um, anyway, I really welcomed those early talks to the group. So, I'm super excited to have you here today. Before we get into the questions, why don't you give our listeners the thrust of your book?
Nelson Repenning: Yeah. So, my research, as you know, you generously mentioned, really, I've only focused on one question through most of my career, and we can talk about how I got there. But basically, it boils down to why don't organizations use the tools and practices and frameworks that we would all agree are good things to do? Uh, when I was a doctoral student cutting my teeth, that was in the era of the quality related tools. So lean production at Six Sigma and so on.
A little bit later, I worked in high hazard environments like oil and gas. And there it was sort of even more shocking what is required to run an oil refinery safely, for example? It's pretty well known. There are zillions of books and experts, and yet they turn out to be remarkably dangerous places. So, I have thought a lot about basically the phenomenon of organizations know more than they do. Right. And how can we fix that? And the thrust of the book really boils down to the core idea is that much of what we do in management is implicitly premised on the idea that we can predict the future with some degree of accuracy, and we can predict our impact on that future with some degree of accuracy. And this manifests in lots of very familiar processes.
You know, we have strategies, we have budgets and we have plans and so on and so forth. So that's kind of what underlies all the tools we use. But at the same time, every business article starts with the same sentence, which is the world is changing faster than it ever has before. I don't know if that's true or not, but the world does change pretty fast. And so, where the book starts is the diagnosis of this problem of why we struggle so often to use new tools boils down to that we assume the world is what we call static, but in fact it changes pretty rapidly.
And so, what happens is, is that once our strategies and plans no longer match the world we live in, then we spend our lives essentially working around those plans. And so, you know, I often use the metaphor of we have duct tape and chewing gum and safety pins to sort of hold this environment together. And that then leads us into this phenomenon of what I've often called firefighting, where you're basically the system is managing you rather than you're managing it. And so, the book is really Don's and my answer to what to do about that. And we could go into those details.
But it really the core thesis is if you accept that the world is not perfectly predictable, you will probably design many of your core processes differently. And the book hopefully gives some guidance about how to do that.
Christopher Reichert: And do you think that that phenomenon of setting some sort of plan, some strategy in motion, like a set time of the year, whether it's a budget or a review, is that unique to the United States or to capitalism? Do you find that it's different?
Nelson Repenning: It's handled in different cultures differently. My experience is that it's pretty common across most organizations. Where I think it differs actually is in the size of the organization. So, you know, if you think of small startups, you know, sort of in the Starbucks napkin phase, they tend to be very dynamic entities, right? They're pivoting, they're changing. And because they're small, the communication flows pretty freely. And that often works quite well given that early stage. And then if they're successful, they grow.
And as you grow, you do have a need for more coordination. So, they have strategies, budgets and plans. I'm not saying that those things aren't necessary, but if you're not careful, particularly with success, there's a kind of hardening of the organizational arteries. And I think you can think of the book in some sense as a fitness program to loosen those up a little bit and hopefully get the best of both worlds. We certainly still need planning, but we probably also need to be a little bit more adaptable.
Christopher Reichert: I was thinking about you. You made a comment somewhere, whether it's in the book or something I read about, you know, deciding whether or not you want to, what improvements matter, and having that buy in from the leadership team or even individually, like, do I do that Windows Update, you know, now or do I put it off?
Nelson Repenning: Right.
Christopher Reichert: But then there's always the question of, well, I might go with Windows Update, maybe historically not to pick on Microsoft, but, you know, is it really going to give me any benefit? And then how do I get buy in to go in that direction without getting egg on my face? You know, think about the firefighters, that metaphor that you used, how they're celebrated for getting it done. And so, then they get promoted.
Nelson Repenning: Right. So, there's that short term, you know, put the fire out versus the longer term fix the reason why we had a fire in the first place. Yeah. And I think you've got it exactly right. And I think this is why this problem can be so hard, because there's a host of activities that most organizations would want to do.
And safety is probably a perfect example of where if you do everything right, nothing happens. In fact, John Sterman and I have a paper called Nobody Ever Gets Credit for Defects That Never Happened, which actually we didn't make up. It came from someone we interviewed. And so, if you think about an extreme case safety in an oil refinery, a nuclear power plant, if you run the world's best safety program, nothing happens. And that's exactly what you want, right? Nobody gets hurt, everybody goes home. But it doesn't give us that visceral feedback that our brains really like when we're trying to learn something.
We use the metaphor in the book of a video game as sort of the ideal learning environment. Safety is the opposite of the video game. Nothing happens. You don't get any feedback. And so, as a consequence, it is the easiest thing to cut when you're having a tough year. You know, maybe we can delay this repair activity for another year, or maybe we only need twelve hours of training instead of eighteen or something like that. And then when you make those cuts, in many cases nothing happens, right? And you get exactly as you said, that immediate feedback that, oh, I spent less money on maintenance and safety. My bottom line looks better. My boss took me out to dinner. All is good until something really bad happens. And so, I think it is a really core problem. And what's also interesting is I think some industries have this much more acutely than others.
So, the example I often think of is if you have a consumer facing app or website, you know, maybe I make a change. I put it up over the weekend. There are a few defects. You know, maybe I didn't sell some soap. I fixed the defect. Right. You can iterate there. And the risk profile is not very high. Contrast that with the energy industry. I think what makes that context so hard is the events you have tend to be pretty rare, which means you can do it wrong for a really long period of time. But when you have them, they tend to be catastrophic.
And that is just a very difficult environment to learn the right lesson in. And that's why in all those industries, every five or ten years, you see a major catastrophic incident. And then people, how did we not learn this lesson? Well, you learned it once, but then nothing happened. So, you forgot it. And then, you know, sadly, history tends to repeat itself in that environment.
Christopher Reichert: Yeah, one hundred percent. Years ago, I was, uh, running the IT department for a bunch of radio stations in Australia. And my team, we worked hard so that that the systems are up every day. There were no viruses. There were no, the printers worked whatever, whatever it was. And I was called in to the CFO's office and he said, you know, like we're trying to figure out whether you're worth it. Like, you know, because obviously we cost money. And I said, well, but I have one hundred percent uptime. I have because, yeah, but like, no one's seeing any reason, like we think it's for us. The system just works. And I said, well, and I realized, so what's the message? Should I fail occasionally? Is that what we need is maybe we need some opportunities for firefighters to step in and feel good.
Nelson Repenning: It's a great question, and I think there's a couple ways to, I think, solve that problem. I think number one, there's this very interesting phenomenon that you see in the high hazard industries where as near-miss reporting goes up, the actual number of incidents tends to go down. And it creates this interesting paradox where often if I go to a facility, I'll give them advice, you know, do a better job of reporting near-misses because those are defects. You know, it's basically a gift, right? Something almost went wrong. You can learn from it. But nobody got hurt. They start doing a better job on that. And then they get called in their boss's office like, what's wrong? Safety's getting so much worse. We have ten times as many near-misses as we had before. Well, no, you don't have ten times as many. You just are doing a better job of capturing them and you're learning.
And so again, as they go up, the actual number of incidents might go down. So, you know, in your case, if you could capture a metric that said, well, here are the number of times we almost had something bad happen and show that that's getting better, you know, that might build some confidence.
And then I think the other way, and this is a sort of central theme of the book, is I have come to believe that organizations typically are not standing still. They're either moving forward or moving back and they're moving forward part is constantly finding the next problem to solve, which both makes people feel good, because human beings like to solve problems. And it gives you tangible evidence to show to your boss that, oh, we improved productivity here, or we implemented this new technology, or we got the fifth nine and the nine point nine or whatever it might be. But I still think the situation you describe, which is analogous to lots of prevention roles, is hard precisely because if you do your job exactly right, as you describe, nothing happens. And it just our brains are just not designed to deal with those kinds of situations.
Christopher Reichert: Yeah. So how is a middle manager or someone with limited power, in other words, not the CEO or the C-suite? How do you...you mentioned the Starbucks back in the napkins. You know, the startup it's easy to see in the in a startup, you know, the cause and effect, right? We didn't make that sale or the product failed. And so, people are leaving or whatever it is for some of our listeners who might have who might have more limited power, how do you get the attention of senior leadership, or those that matter, to get on the path of a shared vision? And then I guess the I guess there's the patience for the process that you talked about, which was, you know, there was the clothesline for Fannie Mae.
Nelson Repenning: Yeah. Let me answer that question in two or three ways. I think philosophically, uh, and this is for, you know, alums that took system dynamics. You know, when I was in the system dynamics, I am in the system dynamics group. But when I first taught the class, the sort of central thesis was the world is a really complicated place, and we're going to teach people how to build models so they can understand that complexity better. And that definitely does work.
But it turns out building models is hard, and we're probably not going to get every employee to do that. I think what dynamic work design does, and what I hope we do in this book, is we kind of take that argument and turn it on its head, which is to say, rather than trying to change people's mental models is hard. Let's see if we can make environments simpler so that people can learn the right lessons without having to do all this complicated analysis.
And so, to your question of if I'm a middle manager and I sit in the cube and I want to make progress, the advice that Don, my co-author and I always give is pick a small piece of an important problem, probably one in your jurisdiction, and see if you can make progress fast. As an example, I teach a course here for our executive MBAs where they have to go do a project in their home organizations. We give them the advice of pick a problem that you can make progress on in thirty to sixty days, and they always push back. Well, you know, I'm a middle or senior manager. I need big initiatives. I need to solve big problems. And I said the problem with that is that, you know, unless you're the chief executive officer and you don't have other stakeholders to answer to, it's hard for owners to have the patience for a two-year change initiative. And so, if you pick a small problem and you make progress fast, two things happen, which is you learn a lot about how your organization actually works.
And the second thing is, even though it's a small problem, I don't think anything propagates change like real results. And so, the kind of maybe the follow-on piece of advice to that is if you can pick a problem that is an enormous pain in everybody's ass, you know, it's this one process that we don't like, or it always is a hiccup and just make a little progress on that. People will love you for that. And then people will start to, hey, what's happening over there that Chris is doing? And then I think you have, you know, an opportunity to then propagate it.
I think the contrast to that approach is, you know, and Don and I actually dedicate the last chapter of this, you know, I hope people love the book, but do not turn it into a change initiative. Right? Don't print up dynamic work, design T-shirts or coffee mugs and have a two-day offsite and stuff like that, because that approach to change just does not work. And it particularly doesn't work for the hypothetical middle manager, because people just aren't patient enough to wait for two years to see whether this thing works or not.
Christopher Reichert: I was thinking about the in the seventies, when American car manufacturers were just making bank, and from the fifties to the early seventies they were selling bigger cars, and inefficiency was not a factor. Right? And it was just, you know, we so they thought of themselves as a company that made big cars. And then came the oil embargo. And they had, you know, the Japanese ate their lunch for a little while. And I was thinking about how that, you know, we talked about that S-curve in business school. where you have adoption. And then it grows and you're successful. But at some point, it peaks and starts falling off. And then how does an organization transition to the next iteration? So, you know, Steve Jobs was, you know, famous for ditching successful products for the next one, even though it was making a lot of money, bringing a lot of revenue. And I was thinking if this was kind of a similar. So, this is the buy in question of.
Nelson Repenning: Right.
Christopher Reichert: So, you know, the maybe there was someone back in the sixties saying, hey, we should maybe think about efficiency, or I guess what I'm getting at is, you know, it's difficult for an organization to think that we're not a car company, but we're a transportation company. We're not an oil company; we're an energy company. So, whatever that form of energy might be. And I'm trying to think how organizations. So as Harley Davidson, you gave the example of how they had a huge backlog. On their in their system. But there were even the Broad Institute you know, with, with. Everything kind of back backed up at a certain choke point basically.
I mean those are very good examples, particularly because they were successful.
Nelson Repenning: Right.
Christopher Reichert: Are there examples you can give where, you know, you've consulted with an organization, and you've just hit a brick wall and then, you know, and how have you regrouped.
Nelson Repenning: Yeah. So, let me answer that question again in probably two ways, which is, number one, I think at the heart of this is a very core question about how you create efficiency? And, you know, there's no question that the auto industry 50s through 70s was pretty fat and happy, but they thought that they were enormously efficient and that basically the way that they did that. And of course, it's much clearer in hindsight than I'm sure it was in the moment, was they did it through trying to control everything every very tightly.
So, in fact, I did my dissertation a million years ago at Ford, and I remember going to their electronics plants, and they bragged that every piece of equipment was measured, every shift for the exact number of widgets. And if you didn't make your pack count, you know, Chris, you were going to get a talking to from your supervisors, right? So, there was this very elaborate infrastructure that, you know, now, I would say was basically there to squeeze the life out of people in their equipment.
I think what we learned from the Japanese manufacturers, particularly Toyota and Honda, which is there is a different approach to efficiency that in our nomenclature would be more dynamic, which is that you get efficiency not by squeezing the life out of people and equipment, but by using a little bit more of their brainpower to constantly solve the next problem. And so, yes, maybe you're not as efficient this month, but if you have a steeper slope in terms of, you're getting better, right, that will eventually take you to a better place and continuous improvement and lean production, we're all manifestations of that.
I believe, now I cannot prove this, although I'm collecting anecdotes, is that when you go with that latter approach, it builds a more general set of skills that will help you adapt when you face one of these inevitable technological transitions.
And so, in the book, we describe the Broad Institute, who was the lead users of our work. They are the world leaders in gene sequencing. We worked a lot with the lab, and there's a story which I won't go into all the details of in March of 2020, they're about to shut down for Covid. They get a phone call from a frantic Boston physician of, hey, do you guys know how to do Covid tests? Well, it's not exactly what we do, but we have some of the technology here. Six months later, they're one of the biggest Covid testing labs in the country. No, that's not General Motors, right? They're an organization probably measured in the hundreds of millions rather than billions. But nonetheless, I think what happened is they had built so much skill in solving small problems and moving the organization forward, on a daily basis, that that certainly helped them make that pivot.
Now, they're enormously talented people who are very, very smart. And I think that's what you're seeing in the world of electric vehicles right now is actually, you know, the Toyotas of the world are just better at running small experiments and changing as they go. And, you know, obviously Tesla doesn't have any of that baggage. And they get to come as an upstart. But I think the incumbents are competing reasonably successfully, successfully with those. So I think that problem solving approach or dynamic work design, as we call it, you can kind of think of it as a general fitness program that if you suddenly have to switch from golf to tennis, of course there's still a lot to learn, but you're going to be a lot better off if you have been to the gym on a regular basis than if you're starting cold.
If you remember back in the early days of Covid when you went to have a sample taken, they had these long, brain tickling swabs that the nurse had to stick up your nose, which were enormously uncomfortable. One of the parts that was very in short supply was the long tube that you would then stick this in. And so, they realized in their first iteration that they were going to run out of these tubes. The little blood tubes, which are about half the size, were readily available. Nobody was using them. So, they figured out, you know, if we just take the brain tickler swab and we break it in half, we can use this blood tube, right? Great. We get rid of a really important supply constraint. Then they realize maybe we don't have to fill the tube with the sort of transport medium. And so, they did some tests and got an approval that now they could put it in dry.
So, by solving all those problems, then when they went to scale again, they had to solve a whole bunch of other problems. But they learned an enormous amount about what it was really going to take to get this done. You know, I can't run the counterfactual, but I think if they had sat in a conference room and a whiteboard and said, okay, let's design a line right now that's going to get us to one hundred thousand tests a day. There's no way they would have anticipated all the stuff that they discovered when they did the sort of initial experiments.
Christopher Reichert: And, you know, one of the things you talked about in your book was the human chain. So, connecting the right people in there. That's a culture component as well.
Nelson Repenning: Right.
Christopher Reichert: So, noticing the right skills, both from a technical perspective and a and a personality perspective. To me, it seems one of the harder components of change is getting the buy-in that we talked about earlier, but also recognize senior leadership, or even anyone recognizing where the incumbents don't want change. And I'm curious how you have any tips on getting around that.
Nelson Repenning: Yeah, I think, you know, the basic idea behind the connect the human change principle is face to face communication is one of the most valuable and most expensive elements in the work design toolkit. You know, if we have a meeting with ten people, that's ten hours of work that's not getting done. We want to make sure we put that in the right places. And the essential idea there is that face to face communication is really good for resolving ambiguity and uncertainty. And so, I try to tell the students, you know, think of it as a Lego block that you want to put in the right places in the process, where there's significant ambiguity and uncertainty to be resolved. The problem is, is I think my sense is from the companies I worked with, we have gotten to the place where we're using face to face communication, and then things like email and instant messaging almost exactly backwards, right?
So, think of the archetype of the bad meeting. We walk into the meeting. I watch PowerPoint for 55 minutes. That tells you that everything is fine, even though I know full well that things aren't fine. I ask one softball question to the presenter at the end, and then I walk out in the hallway, and I'll IM you the real problems. And then we spend all night on email, actually dealing with the real stuff. If we could swap that, the efficiency gains are actually quite stunning.
You know, a couple of different places we worked with by one well-placed staff meeting could sometimes take hundreds of emails a day out of the out of the flow. If it's well designed and it's there for a particular purpose. I think trying to put that in place is really interesting, because I think organizations often fall in sort of two ends of the continuum, which is either they're very social places or they're just communicating all the time.
And that situation sometimes we're telling people like, you don't have to talk to each other eight hours a day, like, go in your office and do some work. That's often in the more kind of start-up. High tech.
Christopher Reichert: Was that the Dan walking around Harley causing chaos?
Nelson Repenning: Yeah, exactly. Don was done right. And, you know, and finally, one of his reports was like, uh, boss, you can't keep doing that because you're creating more trouble than.
Christopher Reichert: Right, right.
Nelson Repenning: And then I think on the other side, you know, and this is probably more prevalent in the remote world we are today is you have organizations where everything happens by electronically mediated communication. And the result of that is typically just a ton of iterations, right? You know, I have more emails in my inbox than I could count, than text messages. And I think that's pretty ubiquitous. The sales pitch there is hard because it is a cultural change. And I think, you know, back to the theme I offered earlier, we have had much better luck by getting people to focus on delivering the work first or solving the particular problem. Like, okay, we need to get this patient result back faster, then map out the process.
We have this little technique with stick figures that it's very straightforward, that, you know, I do my part and I hand it to Chris. Chris does his part. He hands it to the next person and then get people to think about, okay, in all this chain of touching the work. Where is there a place that we need a meeting? Or where is there a place that uncertainty is getting resolved? And often we'll ask people to just to draw arrows to show the information going back and forth. And when you get this little kind of thicket of arrows going back and forth, okay, that means there's a lot of iterating going on. And that's probably the place where you need that need that particular meeting. And if we can get them to run the experiment and they're like, oh, wait, in that fifteen-minute meeting, we got more done than we get done in two weeks. Then typically I've got them hooked and then they'll start to think more broadly.
But the change strategy is sort of the same as we talked about earlier, which is find that small place where you can generate a few results. And then once people see this alternate possibility, then I think it's much easier to then propagate it to other places.
Christopher Reichert: Do you think this is the one of the reasons why a lot of organizations are having this back to office motion?
Nelson Repenning: Yeah, I definitely I think, you know, the remote work has probably created more iteration, you know, via email or text message or whatever. And I'm sure people are feeling the cost of that, that the email chains are going longer, but I think there's other problems too, you know?
So, I'm sadly at the age where my kids are now in the working world. And I think as I watch them, you know, in their first couple jobs, it's hard to find mentorship opportunities. And I think even with our PhD students here, when I was a student a million years ago, half of what I learned was not in the classroom. It was sitting in the lunchroom, and Steve Graves or John Sterman would walk in. And I think apprenticeship is still a really important learning mode, and those random interactions easily get lost when you're fully remote.
And we're trying to get more people in this building here at Sloan for exactly that reason, because research often starts by a hallway conversation or something that we see in the lunch line or something like that. So that's serendipity that the comment.
Christopher Reichert: Yeah, that makes a lot of sense. Is there an upper size in an organization where they need to be revolutionary versus evolutionary? And I guess I'm thinking about like a skunkworks type of project where you can't you have to take it off the main production line, whatever that production line is for that business, and have some somebody pull it into a side parallel so that I guess you don't run out of patience or you can kind of prove it more, more quickly.
Nelson Repenning: Yeah. So, this is a great question. I am not an expert here, but my read of the literature on this is it is a high yield, high risk strategy. Uh, you know, so if you believe the argument that I'm sort of preaching here is that you can to some degree have your cake and eat it too, by continuing to solve small problems. And you get this trajectory where we're constantly evolving the technology. And another way of saying this is, I think my thesis is you don't want to think of organizational change as something that happens every eighteen to twenty-four months. You want to think of something that happens every day.
That said, you certainly could imagine cases where you can't wait for that slow burn that I'm describing and we have a new technology, or we have a new need in the market. Okay, let's go get a warehouse somewhere. We'll put a bunch of people in there and see what they can do. I have no doubt that in most cases, the things they will produce will be pretty fabulous, and I think most people would salivate at the opportunity to go be part of one of those things. I think the hard part is, can you then reintegrate it back into the organization? Because I think often it's rejected like a transplanted organ.
I must say, I'm not sure I know the magical recipe to sort of put it back in play. And there's lots of examples out there. You know, GM had its whole Saturn program at one point. And, you know, I think at Apple, that's sort of the, um, you know, tension between the Mac team and the previous team was legendary, although the Mac team obviously won. So, I think it's necessary. But I think, boy, you need to think really hard in advance of if this thing succeeds, how are we going to reintegrate it back into the mothership? And probably the way to do that is to, you know, swap people back and forth so you don't get this kind of pirates and peasants or whatever they had at Apple where, you know, they start getting in dispute with each other. But that's a hard problem. And it's not actually one that I worked on a lot. So, I have to take this with a grain of salt.
Christopher Reichert: Yeah. So, you're saying there's some disequilibrium in the management team and structure could actually dislodge some of that?
Nelson Repenning: Yeah, I think so. I you know, I think I would say in many cases a better strategy. Well, let me back up. One of the things that I think we talk a little bit about in the book has been really an interesting part of the research I've done is you can take the most dysfunctional, bureaucratic, screwed up organization, put them in a good crisis, and temporarily all that BS melts away and they become remarkably functional. And I often build in this in my teaching by saying, hey, remember your best experience. And like, oh yeah, we could do this. Because once people have done it once, then they are in a better shape to do it again. And so, I think in some cases, if you can really frame up that crisis, you can get the whole organization headed in the right direction.
The trick, of course, is that once the crisis dissipates, you want to make sure you don't backslide to all the stupid stuff that you were doing before. Well, another way to interpret what's in the book and dynamic work design is how to keep a small, steady burn of little crises so that we keep that energy and keep moving forward, rather than having to wait for something to go horribly wrong in the outside world.
Christopher Reichert: Do you think capitalism with and particularly if it's a public company, is it up to the task with the quarterly reports and the need for, you know, you talk about the oil industry, where they have all the tools, yet they're kind of driven by that need to kind of trim here and cut there by some random number, cut it by ten percent without really understanding what that means.
Nelson Repenning: So this is such a great question and I'll so the first thing I'll say is that often when I talk about firefighting and stuff in class, one of the things that happens pretty regularly is someone will raise their hand and say, oh, great talk, but I get this it's my boss that doesn't get it, you know? And once in a while the boss is in the room and they'll raise their hand and say, no, no, I get this. It's my boss that doesn't get it. And if you keep going with that, you know, pretty soon, like all the world's problems are caused by Wall Street analysts and short-term earnings and so on and so forth, I don't think that's actually a fair characterization.
First off, I think that short termism is not unique to, you know, financial analysts. I think it's a pretty embedded part of our psychology. But I also think that there are plenty of companies that work their way around it. And I think have learned over time that, you know, whatever my share price is, my share price is we're in the long run. And, you know, people often ask me, are privately owned companies easier to work in? You know, I would say the few that I've worked with, the family owners are kind of hard ass too. I'm not sure anyone has the freedom to, you know, only think about the ten-year horizon.
And so, I think the solution to that is, number one, break the problems down into little pieces. But then I also think there's a really interesting thing. And in the book, I use this analogy. One of the things I like to do outside of work is I'm a pretty avid bike racer, and there's this interesting phenomenon. When you're racing in a group, if you're one of the stronger people on a given day, you get to dictate the terms of competition, and if you're one of the weaker ones on the day, you get those terms dictated to you. And I think for many organizations, once they get on the good side. So, they're leading the organization because they built the capabilities, they've done the right stuff. They have much more latitude and say, this is what we're going to do. This is the direction we're going to go. And if you want to buy our stock, that's great. And if you don't, that's fine because there's other people that want it too. Um, and so, you know, I hope that more people can get to that place and maybe be a little bit less concerned about the about the quarterly earnings.
And I would say this also, I think has to be tempered with very much a horses for courses kinds of argument. And it goes back to what we were talking a little bit before. If you are in an industry where the risk profile is low and the time delays in your technology are relatively short, I'm making a consumer facing app or website, you know, then I'm not sure that, you know, all that intense pressure is hurting you all that much, you know, may hurt your ability to retain employees, but that's kind of a different topic. But again, if you take the energy industry as a sort of extreme case, that is a place where you can do it wrong for a long period of time, get very much rewarded for it by the markets. And then when something bad happens, it's bad. And I think that's a place that requires a lot of wisdom in leadership.
And I will tell you, and this is advice I give to my students all the time. If you ever meet a manager who's had a fatality happen on their watch, that person is never the same again, right? And it's just, you know, there's no quarterly earnings that is worth that. But I think it's hard to imagine that in advance. And so, then I think that's where the culture of the organization starts to be really, really important in that context because it creates some bright lines that hopefully you won't, won't cross.
Christopher Reichert: So here you are. When did that spark light up for you and your youth?
Nelson Repenning: Yeah. So, I think the origin story, perhaps origin myth would be more accurate. I was a PhD student here. As I said, it was during the era when I think the Asian manufacturers were on the rise and I was in our operations management systems dynamic group and it's MIT. So much of the research was very technical, very mathematically oriented. So, it was decision-making tools, inventory and scheduling algorithms, very sophisticated stuff. And I frankly didn't feel like I could compete. You know, I felt like I knew some math from where I came but compared to the other students I was competing with, I just felt like I was perpetually behind.
Just pretty randomly John Sterman and I came across this question that I think today borders on heresy, which boils down to, do people actually use these tools and processes that we are creating? And the answer turned out to be maybe sometimes, but not always. And that then opened up this much wider sort of inquiry into not just the stuff that we were developing, but why don't people use the safety tools?
I spent a lot of time in R&D, a lot of books written on what you should do to develop new products, and people routinely violate that kind of stuff. And this has just become again; it's really the only question I've ever worked on. So, I think that was part of it. It was just a very interesting question That seemed very relevant.
But then I think the other thing that was, I think the spark part particularly came as I started a little farther in my career and started to talk about this stuff in public talks, it really resonated with managers, and I was really able to tap into a frustration that they had experienced, that they hadn't been able to give a name to. And that was just really exciting, because I felt like this is exactly what a professional school should be doing, right? Which is we're doing hopefully rigorous research, but in ways that is really informing practice in a in a meaningful way. And we certainly hope the book continues that.
Christopher Reichert: And so, after your so when you got your PhD, which was what, in 1996, did you did you stay at MIT?
Nelson Repenning: I did, I went on the job market. I had a couple offers at other places. Uh, but I was exceedingly lucky that there was a job in the System Dynamics group that year. And so, I applied for the job, and I got to stay. So, I literally moved my office one door from, you know, my little doctoral student closet to the slightly bigger junior faculty office.
Uh, it's funny, when I showed up in 1991 as a PhD student, you know, my whole plan was to be here for four or five years and then go back and teach at a liberal arts school like I had done my undergraduate work. And that was thirty-five years ago. So, MIT is definitely an absorbing state. There's no question about that.
Christopher Reichert: And how have you seen Sloan working with the System Dynamics group evolving? Tell us about that evolution. Because, you know, like you said, early days, it was kind of this niche, you know, very highly technical thing, which I'm sure it is still, but it seems to have gone more mainstream. I don't know if maybe it's part of the it seems to me part of a feature, a key feature of like the attraction for people to come to Sloan.
Nelson Repenning: Yeah, I certainly hope so. It's one of the things that we do here that no other business school does. It's an appeal. You probably played the beer game when you were a student. It was developed here. It's a signature experience. I think it's a little bit of a double-edged sword. On the one hand, uh, yeah. I think it's a big appeal because you get to learn something that your peers are not going to have.
But I also think the industry is a little bit small “c” conservative in the sense that, well, I want to make sure that I get what every other, you know, MBA grad so that I am, you know, an attractive candidate on the job market. So, I think John Sterman, my, you know, thesis advisor, now longtime friend and senior colleague, deserves an enormous amount of credit for popularizing this and showing with, you know, a large number of studies that this is really applicable to what happens in the in the real world.
We're in an interesting place right now, which is thanks to machine learning and artificial intelligence. The pendulum has swung very much towards black box models. Right? You know, ChatGPT does some amazing things. Nobody really knows why. And frankly, the network that it's built on is so big that we're never really going to know why, because our brains aren't sort of big enough to hold that. And it does some amazing things.
System dynamics is a much more what we call structural modeling, which is, you know, we're trying to understand how the system actually works. And so, I think there's a lot of focus on the sort of black box approaches. I'm very confident that the pendulum will swing back, as it always does. And I think in the end, you know, managers will need a range of tools, right? The AI style models are going to be enormously useful for lots of things. And I hopefully the kinds of models that we develop, um, you know, will continue to have their place. I think the real challenge, and the book is in part my heretical answer to this as well, is we know beyond a reasonable doubt that the person who builds the model learns an enormous amount about how the system works. Okay, but the person who does the building is usually not the person who's making the decision. And I think, you know, when I first got here, we had this fantasy that maybe CEOs would have system dynamics models on their desks, and they would run them to make decisions.
And I just don't think that's a realistic depiction of what, you know, a chief executive officer's life is like. And so, I think the biggest research question we need to continue to confront is how do we get the insights from the analysts into the heads of the decision makers? And, you know, the Beer game was an early example of what we call a management flight simulator, which is essentially a sort of gamified version of this. I have come to believe that maybe we need to translate the insights into structural changes that you can make in your organization, but I think it's a big, open question that we need to continue to really think hard about, because it's a powerful tool set, but not used nearly as often as I think would be appropriate.
Christopher Reichert: Yeah, I remember when I was at MIT, I sat in on a few of the of John Sterman's classes, and I thought I didn't even know where to begin to kind of latch on to it. But I guess your dynamic work approach is, is probably the answer to that, which is, okay, so you build one model just constantly iterating, constantly iterating. And once you get a new data point, you insert it into the process and see what effect it is.
Nelson Repenning: So, one of the debates in the system dynamics field is there are some pencil and paper tools where you draw loops and causal diagrams, and that can go all the way to formal models. And there's been this endless debate since I've been in the field of are the pencil and paper tools enough, or should you have a full scale calibrated, you know, multi equation model for every issue? And I think the answer to that question actually turns on how expensive and how dangerous our experiments in the real system.
Right. So, if you take some of the work and firefighting I've done, you know, you can characterize the system in about five or ten minutes on the board with some simple diagrams. I've built lots of formal models, but that's sort of irrelevant to this. And I think in that case, you know, there's some pretty clear experiments that you can go run, go run, that if you're wrong, it's not going to cost you that that much. And so, in that case, I think it makes sense to, you know, get the intuition very quickly and then get people into the field changing their behavior. We do this case in class of GM's decision now many, many years ago, to decide whether they were going to stall the OnStar system in all their cars. Okay. That is a decision that in current dollars was probably a multibillion-dollar bet. In that case, it makes a lot of sense to have a very detailed model and do a lot of analysis, because the cost of being wrong is enormous in that situation.
And I think the field needs to get their head around that a little bit more, that the depth of analysis is in large part dictated by what's happening in the real world. If experiments are cheap, scribble on the board. Let's just go try something. If experiments are really expensive and being wrong is going to be enormously costly, then it's probably worth the return.
And John is working on climate right now, which is probably the sort of illogical conclusion of that argument, which is we're only going to run this experiment once, and if you believe the models, if we're wrong, it's going to be immensely costly. This is a case where it really pays to have a very precise, you know, detailed formal model, because, you know, we can't really run experiments in the real world unless we colonize Mars.
Christopher Reichert: So, what advice do you have for prospective Sloan students who might appear in your class?
Nelson Repenning: So, uh, great question. Uh, I can give you two versions of this. I think the first one, which is the most important, and this is a speech I give to my incoming PhD students, you know, every year is MIT is a very low structure place. In general, if you show up here and you sit in your office, I'm not sure anyone's ever going to check on you. Right? You might get an email at some point that says you've failed out of the program. And please clean out your office. Maybe. But that's just not how we roll here.
But the flip side is, is I think you could knock on any door on the institute. Nobel Prize winners included. And if that person's there and you have something interesting to say, they'll probably talk to you. So, I think the first piece of advice is it's just an environment that really rewards a little bit of sort of intellectual entrepreneurialism, right. You've got to kind of get out. You've got to go see people. There's a great seminar, probably three great seminars every day. So, you got to pick and choose where you go but get out of your office and you really have to choose your own adventure here. I think that's number one. And then I think number two is thanks to our former dean, the now sadly deceased David Schmittlein. We have a wonderful portfolio of programs and so get to know the different options that are available to you and pick the one that fits you best.
Christopher Reichert: Well, I want to thank Professor Nelson Repenning for joining us today on Sloanies Talking with Sloanies.
Nelson Repenning: Thanks for having me.
Christopher Reichert: Sloanies Talking with Sloanies is produced by the Office of External Relations at MIT Sloan School of Management. You can subscribe to this podcast by visiting our website, mitsloan.mit.edu/alumni, or wherever you find your favorite podcasts. Support for this podcast comes in part from the Sloan Annual Fund, which provides essential flexible funding to ensure that our community can pursue excellence. Make your gift today by visiting giving.mit.edu/sloan.
