Ever since I heard about the amazing Moniac machine made by fellow New Zealander Bill Phillips in the 1920’s, I’ve been intrigued by the idea of a "business machine". Now, I’m not talking about IBM and business machines that complete routine business tasks but more a machine that communicates key information clearly, in this case "Physically" - intrigued?

Bill designed and built the Moniac machine (Monetary National Income Analogue Computer), to show the macroeconomic flow of money in the United Kingdom national economy.  Of course, in the 1920’s the nearest thing to a modern-day PC was an abacus and you couldn’t just create a new piece of software to run on one of those! So, Bill did what any keen man would do by getting out into his shed and employing hammer and nails.

As it turned-out Bill’s father had taught him quite a bit about hydraulics and fluid dynamics so Bill decided to build a new fangled water wheel type device. What Bill came up with was a hydraulic, physical model. Although not overly aesthetic, the Moniac did prove to be a fantastic and accurate ‘living’ machine.

Water was pumped into the top of the machine and then filtered down though a central column and into various pipes and chambers that represented various ’siphoning’ functions of the economy such as health, tax or education etc. Once in equilibrium, the Moniac could be ‘upset’ by changing any of the variables. For example, the tax rate could be altered and then the impacts traced through the machine as it readjusted to a new equilibrium.

The amount of available money in the Economy was represented by how much water was in the top tank. The net flow of money in the system would gather in a tank at the bottom and was then available to be pumped back to the top to restart the cycle.

The great thing about the Moniac machine was that it took into account the dynamic nature of an economy. Any Economy (like any business!), never stands still, things are rarely held constant and each time any variable is changed, the effects ripple through the economy in a number of ways. For example, a tax rate change will effect disposable income which will affect saving and investment. The machine solved nine simultaneous equations to achieve a new equilibrium.

The Moniac machine proved popular with economists around the world. More Moniacs were built and sent to four British universities, to Melbourne University and Harvard Business School. The physical nature of the machine brought a certain tangibility and realism to the model that was interesting and fun!

To quote from NZIER: Written explanations cannot do justice to the impressiveness of the Moniac – it is something that is best experienced ‘live’. It is a valuable, entertaining and unique teaching tool that shows students that economies are very complex entities in which everything is linked in one way or another and to varying degrees. Observing the MONIAC in operation made it much easier for students to understand the interrelated processes of a national economy.

Wouldn’t it be great to have a tangible model/machine of your business - one that enabled you to clearly see each key element and how any tweaks and changes impact every other key element. Your customer service levels fall to 70% satisfaction which effects your repeat purchase frequency which effects your net profitability etc.

To clearly see all the processes and procedures in your business holistically would create a fully ‘aware’ organization that could be understood and improved easily. This would enable your business to continuously evolve through applied and tested ‘best practice’ in every key area.

It is my passion and vision to create just that, a Business Operating System that enables business owners to develop fully aware business that can be easily improved and shared as they thrive in the today’s uncertain economy. Thank you so much for reading and please leave a comment.

Jason

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