The other day Howard and I were driving back from a client meeting. This client had a software system for managing business transactions and continuously referred to it as a model. It seemed odd at first, but it got us thinkingwhat really is the definition of a model?

Unfortunately for us, the word is so overused that it has lost its real meaning. We have to describe what we do to every client who has a different interpretation of our introductory phrase: we build simulation models for a living.

There are mental models images in someones head about how a system works. There are models that describe a process or formulation Joe has a certain model for doing this, ACME Corps business model is . There are models of real things that are abstractions, because the real thing is too hard to deal with geographic maps or equations that describe planetary motion.

What we do here at industrial science is business simulation modeling. Our clients are confronted with a bewildering array of complex problems, and our standard response is to create a simulation replica of the organization at hand. With such a replica, one can experiment in ways that would be problematic and risky to do in real life (what would happen if we tripled our price for widgets?). We use models as tools for the discovery of meaningful insight into the behavior of complex systems like companies and markets.

Some of you may want to learn more about simulation modeling. Let me suggest the following reading list:

1. For a good overview of how models and simulations are used in a corporate setting, read Serious Play by Michael Schrage.

2. For an excellent and entertaining primer on agent-based models, read Turtles, Termites, and Traffic Jams by Mitchell Resnick.

3. Stephen Wolfram spent 10 years of his life conducting exhaustive research and model building for his 2002 book A New Kind of Science. If you dont have time to read all 1200 pages, I suggest you read at least the first 250. An extraordinary body of science.

4. The bible of the discipline of System Dynamics is Business Dynamics by John Sterman. Dr. Sterman was my professor at MIT and is quite possibly the smartest man on the planet Earth (Sterman and Wolfram are too close to call).

Once you have tackled this library, I suggest you read the newspaper. If you truly have a modeling mindset, youll begin to see structure in every article. This kind of thinking is a good test of your progress as a practitioner.

So what is the process for building a model? Are there good models and bad models? What problems are appropriate to a modeling approach? Stay tuned, readers we will be covering these and more as we describe our experiences working in this amazing field.