By Buck Lawrimore, President
Are you trying to manage with assumptions that are 100 years out of date? In recent years I have explored in depth the new science of Complexity and its applications to managing organizations. This is really the cutting edge of innovation, and what I’m about to share with you only a small but growing number of people in the world are even aware of. But I and others believe this new approach to organizations and leadership could become a dominant force in the 21st Century, making management practices of the 20th Century seem archaic.
“Modern management” is based on a mechanical view of the universe, specifically Frederick Taylor’s 1911 treatise, “The Principles of Scientific Management.” His “scientific” time and motion studies sought the “one best method” to do each job. Ever since then, organizations have been driven by the search for greater efficiency, as if people were machines who could work faster and smarter. Anyone who has been “driven” by a demanding boss knows how awful this can be.
The science of complexity is the offspring of an earlier field of study known as chaos theory. James Gleick’s “Chaos: Making A New Science” became a national bestseller after its publication in 1987. Gleick, a New York Times reporter, popularized the “Butterfly Effect,” whereby a butterfly flapping its wings in India causes a series of air movements that eventually result in a thunderstorm over Chicago. In the late 1980s a number of leading scientists were at work discovering order in chaos, using computer models which draw diagrams on monitors, playing out mathematical algorithms at a speed impossible by hand. All of this was very interesting, resulting in some fascinating images and insights. But no one was quite sure how to use it other than improving weather forecasting.
But in the 1990s a group of brilliant scientists (including several Nobel winners) affiliated with the Santa Fe Institute in New Mexico said, in effect, “There’s not much point in studying chaos. It’s too chaotic. Let’s study Complexity, where with the help of computers we can actually figure something out.” And indeed they have discovered many things about “the real world” with practical applications for business, management and leadership. They have discovered some amazing properties of life forms, order and structure using advanced computer modeling, which suggest powerful new ways by which organizations can survive and thrive in the increasingly complex technological-economic environment. Or for that matter in your community–wherever your organization operates.
One reason I am personally interested in these developments is that they provide a more realistic view of reality. I was intrigued to learn about chaos theory but did not see many practical applications. Another reason is that I have had several clients who have found in the past few years that traditional strategic planning is unsatisfactory because it does not provide an effective way to manage people and tasks in an environment of constant change (complexity) on a day to day basis. With some clients, I have explored how Complexity science and its most fully developed application, the Learning Organization, can be adapted for their needs.
In this article I want to outline for you some of the key tenets of complexity science which apply to managing and leading organizations.
A very good and concise introduction is available in Roger Lewin’s “Complexity: Life At The Edge of Chaos” (Chicago, 1992, 2000 – see book cover above right). The gaseous molecules bouncing around in the room where you are right now are moving chaotically, very randomly, with very little order. By contrast, “the science of Complexity has to do with structure and order,” (Lewin, pg. 10) especially in living systems such as social organizations, the development of the embryo, patterns of evolution, ecosystems, business and nonprofit organizations, and their interactions with the technological-economic environment.
“We’re looking for the fundamental rules that underlie all these systems, not just the details of any one of them,” explains Chris Langton of the Santa Fe Institute (pg. 11). “You can only understand complex systems using computers, because they are highly nonlinear and are beyond standard mathematical analysis.” A linear equation such as x=2y can be graphed as a straight line. A nonlinear equation produces a curve. Put several of them together and you have complexity that only a computer can graph, yet still there is underlying structure and order, as in real life.
“For three centuries science has successfully uncovered many of the workings of the universe, armed with the mathematics of Newton and Leibniz,” Lewin continues (pg. 11). “It was essentially a clockwork world, one characterized by repetition and predictability. The launching of a spacecraft to rendezvous with the Moon after several days of travel depends on that (linear) predictability…. Most of nature, however, is nonlinear and is not easily predicted. Weather is the classic example….”
In complex nonlinear systems (including the organization of which you are a part):
1. “Small inputs can lead to dramatically large consequences,” such as the Butterfly Effect noted above.
2. “Very slight differences in initial conditions produce very different outcomes.” The next time the butterfly flaps its wings, nothing of consequence happens.
3. In complex dynamical systems, such as organizations or ecosystems, “global properties flow from aggregate behavior of individuals. For an ecosystem, the interaction of species within the community might confer a degree of stability on it; for instance, a resistance to the ravages of a hurricane, or invasion by an alien species. Stability in this context would be an emergent property” (pg. 13). Likewise people interacting in an organization create a whole that is greater than the sum of its parts, and the properties of the organization emerge from their combined behavior. The interactions of “companies, consumers and financial markets produces the modern capitalist economy, ‘as if guided by an invisible hand,’ as the Scottish economist Adam Smith once put it.”
4. The scientists at Santa Fe Institute are especially interested in types of nonlinear systems known as complex adaptive systems, as found in living organisms and organizations. What makes a complex adaptive system different from a nonadaptive complex system such as the weather is “a compression of information with which it can predict the environment” (pg. 15). In other words, learning! In the words of Institute member Murray Gell-Mann, a genius Nobel prizewinner in physics who speaks 13 languages, “Complex adaptive systems are pattern seekers. They interact with the environment, ‘learn’ from the experience, and adapt as a result.”
5. “Most complex systems exhibit what mathematicians call attractors, states to which the system eventually settles, depending on the properties of the system” (Lewin, 20). “Imagine floating in a rough and dangerous sea, one swirling around rocks and inlets. Whirlpools become established, depending on the topography of the seabed and the flow of water. Eventually, you will be drawn into one of these vortexes. There you stay until some major perturbation, or change in the flow of water, pushes you out, only to be sucked into another” (pg. 20-21). Thus the existing structure of your organization is one attractor state, but changes in the turbulent environment may cause it to change into another type of structure altogether. If your organization resists too long, it may become obsolete or extinct. If your organization learns how to learn, it can adapt to the forces of change and go with the flow.
Now here is a profound truth so important for 21st Century manager-leaders: Most organizations today were established on linear, mechanical principles, considering the organization as a machine, producing goods and services. Science abandoned the mechanical view of the universe 100 years ago. Most of us are still operating on a worldview that is 100 years out of date! This is the Information Age, and nonlinear, complex adaptive systems rule!
“Managers are finding that many of their long-established business models are inadequate to help them understand what is going on, or how to deal with it” (Lewin, 197). “Where managers once operated with a machine model of their world, which was predicated on linear thinking, control and predictability, they now find themselves struggling with something more organic and nonlinear, where limited control and a restricted ability to predict are the norm.”
Practically every manager I know is trying to control the destiny of his or her organization and feeling very frustrated. The world is simply too complex and fast-changing for linear models to work! But what is really exciting about Complexity science is it provides a whole new way to “go with the flow” by taking advantages of the discoveries of “rules” governing complex adaptive systems. Here are some of those rules (adapted from Lewin’s book) and an explanation of what they mean for business and other organizations:
1. “The source of emergence is the interaction among agents who mutually affect each other” (pg. 202). Manager-leaders should focus on developing relationships where people mutually affect each other, especially learning by teams, for innovation and new adaptive structures to emerge. The best way to facilitate this, according to advocates of the Learning Organization (which we will discuss in a subsequent issue) is through authentic dialogue, the open exchange of thoughts and ideas which allow a team to function as a super-human.
2. “Small changes can lead to large effects” (pg. 203). Managers should lead change through many small experiments, which adapt to the wide range of possibilities, and find out which ones work best, then diffuse this change throughout the organization. Let different teams try different adaptive experiments.
3. “Emergence (of order) is certain, but there is no certainty as to what it will be. Create conditions for constructive emergence (of order) rather than trying to plan a strategic goal in detail. Evolve solutions, don’t design them” (pg. 203). Detailed strategic planning simply does not work in today’s fast-changing world. Vision and goals are desirable, but let the strategies emerge naturally. Don’t try to figure it all out in advance.
4. “Greater diversity of agents in a system leads to richer emergent patterns. Seek a diversity of people, their cultures, their expertise, their ages, their personalities, their gender, so that when people interact in teams, for example, creativity has the potential of being enhanced…. Specifically, whatever enriches the interactions (that is relationships) among agents (that is, people) in the system will lead to greater creativity and adaptability” (pg. 203).
Interestingly, the term being used today for complex adaptive systems (economies or industries) composed of other complex adaptive systems (businesses and organizations) is web (as in worldwide web, bringing you this message right now). A web is the combination of all the businesses, suppliers and customers in an industry sector that affect one another. And like an ecosystem, the component systems are dependent upon one another for survival. This is causing “a shift from viewing head-to-head competition as the key force shaping the business/ecological community, to recognizing that each business and ecological community is a complex dynamical system in which competition is just one of many factors that influence the life of the community” (pg. 204).
In the area where I live, economic developers who compete for industrial prospects also cooperate through national and international recruiting to attract prospects to the Charlotte region. The real exciting potential, I believe, is for developers or Chambers of Commerce to take advantage of the diversity in their communities and get people working in (complex adaptive) teams to strengthen local economies, especially as global business becomes increasingly complex and challenging.