Summary of a seminar and discussion with John Hiles, Research Professor, Naval Postgraduate School, Monterey, CA. The seminar was co-sponsored by RAND.

"If we can gain insight into the surprising events that can connect to our actions, then it is quite possible that history will see us as men and women who are shrewd, and sometimes wise, but at least not the architects of our own calamities."

John Hiles presented work at the Naval Postgraduate School on an interactive simulation model that addresses a crucial issue for every organization—budget policy. By creating software that will present players with a myriad of decision-making scenarios, Hiles has created a learning tool that will allow organizations to explore the vulnerabilities and possible blind spots in their policies.

The software does not follow traditional engineering practices. Instead of being limited to following a certain number of predetermined logical sequences, these "software agents" are rational and adaptive, i.e., they can pursue their own goals in a constantly changing environment. Based on the policies and constraints of the organization, the software is conscious of the desired goals of the player and adapts to the environment based upon the consequences of the player's decisions. Hiles refers to this rational and adaptive software as "agents with an attitude." As in real life, every decision in the simulation has a consequence. The player must be able to work within the constraints of their organization and navigate through a changing environment in order to achieve his/her goals.

Such interactive software provides an invaluable learning tool for policymakers and organizations. Not only are the players able to see the immediate consequences of each decision they make, but users can also query the software to see what just happened, how each player responded to the challenges, and how they might improve their reactions so they can reach their goals in a more efficient manner. In a simulated environment, policyakers can learn how to deal with surprises from a global drop in fertility rate to a terrorist attack, before they have to make those decisions in real life. By facing different scenarios, organizations will be able to make more informed strategic plans for the future.