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Building Dynamic Business Models

Everyone talks about "Business Models", but most popular frameworks are just descriptive - little more than abstract statues! We need models that work, doing what the real-world data says is actually happening, showing how the future may play out, and then testing how your plans might improve things. Dynamic, “living” business models simulate reality.

If this is what we need from business models, then this course quite simply provides the easiest, fastest, most reliable method for building them. They can transform the performance of any enterprise, or function, and enable you to tackle challenges with much more confidence. And because you and everyone else can see why everything in the system is changing, you get the joined-up thinking that everyone says they want.

Models help develop plans and solve challenges such as these.
two generic examples

If you are an analyst, consultant, business-teacher or student, then you should know how to build and use these models.

The method is not especially technical - it applies the same principles we have always used for analysing cash flows to modeling all other business resources (customers, staff, products, capacity and intangible factors), and captures how they depend on each other.

But although the principles are simple enough, you can't build dynamic business models with a spreadsheet! Such tools just cannot handle the many interdependencies, the feedback and the threshold effects that pervade real-world situations. And the Sysdea® software enables anyone to build models that match the system's structure and mimic its behaviour with uncanny realism.

What will I learn?

Our core course (Classes 1-4) explains how to create working, quantified models of any enterprise, function or issue, by following our 'agile' modeling process:

  1. Specify how any measure or measures of performance has been changing up to now, and is likely to change in future
  2. Model how those performance outcomes depend on changing resource-levels - customers, staff, capacity, IT and so on
  3. Capture how all those resources grow or decline, depending on how fast they are being won and lost (this is the magic at the heart of a living business model)
  4. Complete the linkages that drive those changes, creating the working model

and you will learn how to use such dynamic business models to explain any performance changes and uprate that performance into the future.

Our extensions course (classes 5-10) adds further frameworks that are very powerful in their own right - for example, for raising the quality of business resources, managing pipelines to develop customers, staff and other resources, modeling how competition plays out in different market conditions, handling intangible factors like reputation and information. These extensions can also be added to the core model of your business to increase the insight and value it offers.

How will I learn?

You can start our self-taught courses at any time and follow your own schedule, guided by our automated messages. In each class you will:

  • watch screen-show videos explaining key principles and demonstrating the model-building steps
  • …and copy those steps to build the models yourself, using our easy browser-based Sysdea® software*
  • use template models of the most common model structures needed, to save time in your modeling work
  • check out many other example models that illustrate further learning

…and you have permanent access to all these videos and models (excludes special offers and student packs).

* Our full price self-taught and tutored courses include two months access to Sysdea®. Thereafter, models remain accessible in read-only form, and full access can be reactivated at any time ($15/month).

Our instructor-led courses guide you through this same process, but also offer:

  • a scheduled class time-table,
  • a forum for raising questions and discussions for each class and
  • regular webinars for additional explanations, examples and Q&A.

We also offer certification options - You can also gain Certification by submitting assessed work.

Teachers … you can adopt the course materials to deliver yourself. Being student-led, the learning-per-contact-hour is very high, and much more engaging than other types of learning. More information here

How can I use what I learn?

You can use these new skills and tools immediately to tackle a wide range of challenges and opportunities in any part of your organisation. As you build these completely transparent models, you - and everyone you work with - will be able to see clearly what causes what, and share an understanding of what needs to be done.

You will be able to build strong, joined-up long-term plans much more quickly and easily than is possible with spreadsheets - whether those plans are for the organisation as a whole or for any function.

… and then you can use the same models to manage those situations continually as events unfold, linking them into existing reporting systems if required.

How much time should I commit?

Working through all the videos and exercises for every class may take about 4 hours per class. However, we explain how you can reduce this time initially by focusing on the key items only. All materials remain available to you indefinitely, so you can fill in your learning by re-visiting the classes and models at any time - they provide a permanent reference-source for your future work.

Class List and Topics Covered

Class segments marked ** are included in the free "Getting Started" course


Class 1: Performance Through Time

Whether we want to grow the business cash-flow, fix poor service quality, or fight off a competitive threat, improvements will happen over time. So the starting point for any business plan, or for tackling any challenge, is a clear definition and picture of how key performance outcomes have changed up to now, and may change into the future. This class shows how to specify this performance-over-time for one or more indicators, and how to set this up as a time-chart so that the model we build will show exactly how that improvement will happen.

  • 1.1   Specifying the performance-over-time to model **
  • 1.2   Is the model for a long-term plan, or for a specific challenge?
  • 1.3   Defining appropriate time-scales and units
  • 1.4   Adding simple calculation of performance outcomes **
  • 1.5   Exploring how performance may change

Class 2: Stocks, Decisions, External factors and performance

We know that resources drive performance - customers drive sales, staff and capacity drive our ability to serve those customers and fulfil those sales. So we can understand changing performance much better if we lay out these causal relationships rigorously, including the simple arithmetic defining how each item depends on others. And those factors driving performance must also be changing, so this class shows the value of displaying time-charts on those factors too - rates of change for customer-numbers, purchase rates, staffing, productivity, and so on.

  • 2.1   How Stocks, Decisions and External factors drive performance **
  • 2.2   Using standard customers-to-sales relationships
  • 2.3   Using standard relationships on the supply-side of the business
  • 2.4   What to do when the objective is a Stock
  • 2.5   Defining non-financial performance, and using look-ups **
  • 2.6   Setting up segmentation

Class 3: Stocks accumulate and deplete

If performance is driven by the resources we have, then our business or department can deliver sustained, strong performance by building and retaining those resources. These so-called Stocks "accumulate" - filling up and draining away over time. In many cases, big improvements can be made by giving proper attention to driving the in-flow and limiting the out-flow, using time-charts to show how those win- and loss-rates are changing.

  • 3.1   Modeling how Flows fill and drain stocks **
  • 3.2   Where Flows come from and go to **
  • 3.3   Using a common customer-flows and sales structure
  • 3.4   Working out period-end and period-average Stock values
  • 3.5   Adding delays to when Flows happen
  • 3.6   Modeling sales for durables: the owner-base and installed-base
  • 3.7   How to model Stocks' growth when we have segmentation

Class 4: Interdependence, feedback and the core system

This is where you get the "joined up" view of the business you always wanted! Growing and retaining resources strongly always depends on what we already have - strong products win customers, service staff retain customers, work-pressure drives staff losses, and so on. These are more than obvious principles - you can quantify and model these causal relationships. Interdependencies also lead, always, to feedback. So we can create reinforcing feedback that drives growth, and cut out 'balancing' feedback so that too-limited resources do not hold us back When all such relationships are added, you have a core working model that explains the performance of the organisation or function, or of any challenge you take on.

  • 4.0   Explaining the principles of interdependence, feedback and the core system **
  • 4.1   Modeling how current Stocks drive Flow-rates
  • 4.2   Decisions drive Flow-rates
  • 4.3   How external factors drive Flow-rates
  • 4.4   Understanding how interdependence causes feedback **
  • 4.5   Modeling the core Strategic Architecture **
  • 4.6   Handling multi-stock feedback: 2-sided markets and intermediaries
  • 4.7   Automating decisions in your models
  • 4.8   Using sub-models to capture segmentation


Class 5: Modeling the changing quality of Stocks

We don’t just want more customers, staff and products; we want better customers, staff and products. (Some cases even get stronger performance from a smaller, better-quality business!) This class shows how to attach quality-measures to any resource-Stock, how to model the mechanisms that cause this quality to rise or fall, and how to use such models to improve the quality of our customers, staff or product-range.

  • 5.1   Changing a Stock's quality with 'attributes'
  • 5.1   Common attributes for standard Stocks
  • 5.3   Modeling performance-attributes
  • 5.4   Understanding intangible attributes
  • 5.5   Modeling multiple Stock-attributes
  • 5.6   When one Stock brings access to others
  • 5.7   Using segmentation to preserve group-differences

Class 6: Stock-development, pipelines and aging-chains

Business development is often "stuck" because we can’t develop resources fast enough - growing managers and leaders, converting customer interest into active customers and sales, launching attractive products, for example. Well-proven models not only capture how resources move through these pipelines, but also show how to manage the many flows that drive their performance - hiring, promotion and retention of staff at each level; driving customer-trial and loyalty, and so on. This class shows how to model these development processes, and use these models to generate stronger results.

  • 6.1   The basics of Stock-Flow chains and pipelines (Staff example)
  • 6.2   Modeling the customer pipeline: a general adoption model
  • 6.3   Product development pipelines
  • 6.4   Asset-aging pipelines and performance
  • 6.5   Tracking attributes alongside Stock pipelines
  • 6.6   Segmenting pipelines
  • 6.7   Financial and other impacts of Stock chains

Class 7: Modeling competition

We all want to fight off competition, to win and hold on to the customers, staff and other scarce resources we need - especially if that weakens our rivals! It turns out that just three standard structures explain every competitive situation and, as before, you can do much more than simply describe the principles - you can quantify and model exactly how competition plays out over time. Armed with these models, you can make much better decisions on pricing, marketing, customer support and so on, to get much better results - even driving competitors out of your way. Similar models also capture competition for staff, intermediaries and other critical resources.

  • 7.1   How Type-1 competition for new customers works
  • 7.2   How Type-2 competition works: stealing existing customers
  • 7.3   How Type-3 competition models capture sales from shared customers
  • 7.4   How competition works in durables markets
  • 7.5   Modeling cases where competition-types operate together
  • 7.6   Competing for staff
  • 7.7   Dealing with multiple competitors

Class 8: Modeling Policies to automate Decisions

Some decisions are so routine that we have "policies" to guide our choices in any period. We show how to use the difference between current performance with targets in order to model such policies and test difference decision-rules.

  • 8.1   How policies compare outcomes and targets to set decisions
  • 8.2   Understanding the "policies" of staff and customers
  • 8.3   Dealing with multiple and conflicting objectives
  • 8.4   How policies affect competition outcomes
  • 8.5   Using models as Key Performance Indicator systems (KPIs)

Class 9: Modeling Intangible factors and their impact

Everyone knows that reputation and staff morale are important, that knowledge is powerful, and that building quality is critical. But although we often measure these factors, it is not so easy to manage them or to work out their impact on performance. This class shows how to specify three categories of intangible factor, concerning state-of-mind for customers and staff, information-based factors, and quality-related items. You will also learn how to model the mechanisms causing these intangibles to grow and decline, how to manage those processes to keep them strong, and how to work out their changing impact on tangible resources and business performance.

  • 9.1   Modeling state-of-mind factors
  • 9.2   Capturing information-based intangibles
  • 9.3   Understanding quality-related intangibles
  • 9.4   Dealing with negative states-of-mind and threshold effects
  • 9.5   How customer and staff behaviour reflect multiple states-of-mind driving

Class 10: Capabilities and learning

Powerfully successful organisations seem to have an ability to just get better and better at everything they need to do - launching great products, building super-loyal customers and great staff, entering new markets, making acquisitions, and so on. You too might achieve great potential if you could better manage how these capabilities get built. In this class you will see how to model a capability by quantifying and combining the development of people and skills involved in a task with effective processes and with the necessary information. Learning is easily modeled as the growth of skills and capabilities, driven by experience at doing the activity.

  • 10.1 Combining skills + data + processes to model "capability"
  • 10.2 How strategic capabilities help build, develop and retain resources
  • 10.3 How learning grows skills and capabilities
  • 10.4 Understanding the power of multiple capabilities and strategic learning

Tutored course Dates:
Prices and registration

Self-taught courses:
Prices and registration

Have questions?

Contact us for advice if you have questions about this course.

"I’ve completed the entire Strategy Dynamics course and started the Business Modeling course. These are fantastic - so great that we are looking to hire people with these skills. Thanks!"
Bob Lamb: Founder & CEO, Foundation for Inclusion
"I want to personally thank you for this great course. It has been the most exciting I have taken. I will definitely do this type of work for my clients at the agency."
Esteban Ribero: VP Strategy - Leo Burnett/Lapiz
"This great course provided just what we need to explore scenarios for competition in the global tax-technology sector, and test our strategies."
Kevin Boettcher: Director, Emerging Business Models & Alliances, Vertex, Inc
"I really enjoyed this class - it has fundamentally changed the way I think about analyzing issues concerning our company’s future. I see the power of the approach and plan to use the technique on issues we are facing."
Mark Holman: Manager, Regional Coordination at PJM Interconnection
"It has been an absolute pleasure taking this course. I will be a strategy dynamics user for life."
Michael Stewart: Lead Systems Engineer, Manager at Battelle
"It is a testament to how well you have laid out the content that we can easily internalize the strategy dynamics concepts. It was quite amazing to see how the model almost had a mind of its own, changing my understanding of our challenge completely."
Stephen Green: Director at Continental Mills
"I have to say that the course really is exceeding my expectation, the material is very powerful, and provides rich and deep concepts."
Ahmad Waleed: Strategy Director, ELM, Saudi Arabia
"I have applied the principles and practices in several business units both at Sun Microsystems, and Microsoft. The resulting performance speaks for itself - everywhere I've introduced this, it remains a key tool in the senior managers' kit."
John Kapson, Managing Consultant, Oracle/Sun Microsystems

The power of models

See more about why these models are powerful (5 short YouTube videos).


New Venture Financing:
CEO Rod Brown explains how his living business model helped test, finance and manage this ambitious new business. Example: Model used to support new venture financing
Power company cash flow and reliability:
Only a living business model could help figure out where this company should focus limited cash to rebuild service reliability, and then manage the program's implementation. Example: Model used to support new venture financing
Launching a new marine technology: MMC Green Technology
Kim Warren explains how this company used a living business model to plan the launch of its environmental protection equipment.
Strategy Dynamics has brought together a very impressive and clear process with great supporting materials.

Sysdea is really user friendly. As I am going through the Business Modeling course I’m building a model for Synergia and as we have two business - one in Australia and one in NZ - the sub-models are great. The example in the instruction video of ‘region1' and 'region 2' fits perfectly.

I’ve always had a problem with web-only software as I am often in situations were web access is difficult - working in hospitals, government departments etc. The problem is not so much building them, but using and exploring them with clients. However, it seems that when they are open everything is stored in cache so I can continue to run the model offline and that may be one way to overcome web access problems. David Rees - Founding partner, Synergia -
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