Complexity

Thinking
Understanding Complex, Adap5ve Systems

Marco Cassone
w/ content adapted from

Jurgen Appelo
The search for simple if not simpleminded solu5ons to
complex problems is a consequence of the inability to deal
eec5vely with complexity.
Russell L. Acko

What is this? How is it complex?

Listen to how we explain this phenomenon.

Share other examples of complexity in life.

Reductionism
Holism
Complexity Theory

Models
Complexity Thinking
Example
Final words

This presenta5on aNempts to apply

the ideas of Complexity Theory to
the management of systems,
resul5ng in whats called
"Complexity Thinking".

We make sense of the world using abstrac5ons in language

(concepts, ideas, etc.) that are necessarily imperfect, messy,
and incomplete. [Key point of Shaw, Changing Conversa5ons in Organiza5ons]

It is a form of interaction

The activity of abstracting is basically a form

of interaction between people in which they
simplify the complexity of their own ordinary,
everyday interactions [] in an effort to make
meaning of what they are doing [].
Ralph Stacey
Complexity and Organizational Reality

To make sense of the world

Sense-making is the way that humans

choose between multiple possible explanations
Dave Snowden
of sensory input.
Dave Snowden
http://kwork.org/Stars/Snowden/snowden3.html#Simplicity

Ralph Stacey
Complexity and Organiza5onal Reality

[<-- Shaw!!!]

to the successes of reductionism.

reductionism

!
http://en.wikipedia.org/wiki/Reductionism

reductionism noun \ri-dk-sh-ni-zm\

explanation of complex life-science processes and
phenomena in terms of the laws of physics and
chemistry
a procedure or theory that reduces complex data
and phenomena to simple terms
http://www.merriam-webster.com/dictionary/reductionism

A problem is that people have become addicted

to the successes of reductionism.
http://en.wikipedia.org/wiki/Reductionism

Thus the need for a

Management Reset.

All system theories were cr

and scientists (left-brainer

Left-brain thinking
All system theories were created by engineers
and scientists (left-brainers).

Analysis in management
This systems movement [] has come to
form the foundation of todays dominant
management discourse, so importing the
engineers notion of control into understanding
human activity.
Ralph Stacey
Complexity and Organizational Reality

This has created a few problems....

Problem: Objectivation
Problem: Dehumanization
Designing human interaction
Cold numbers in spreadsheets

Problem: Alienation
Problem: Objectivation
Instructions from ivory towers
Designing human interaction

Problem: Alienation
Instructions from ivory towers

Problem: Attribution
Problem: Prediction
Blaming people for problems
Controlling the future

Problem: Attribution
Blaming people for problems

Dehumaniza*on Objec*viza*on Aliena*on Predic*on A7ribu*on

This list of problems (an aNempt at sense-making) is also an abstrac5on.

Reductionism
Holism
Complexity Theory

Models
Complexity Thinking
Example
Final words

[Where Marco is
more comfortable...]

Revenge for right-brainers

Some people have suggested more holistic
approaches.

See the whole system

Living systems have integrity. Their
character depends on the whole. The same is
true for organizations.
Peter M. Senge
The Fifth Discipline

Greater than the sum of the parts

The enterprise must be a genuine whole:
greater than the sum of its parts, with its output
larger than the sum of all inputs.
Peter F. Drucker
Management

Synthesis, not analysis

Analysis is only one way of thinking;
synthesis is another. [...] In analysis, something
that we want to understand is first taken apart.
In synthesis, that which we want to understand
is first identified as part of one or more larger
systems.
Russell L. Ackoff
Recreating the Corporation

Actually, there are no systems

Where to draw a boundary around a
system depends on the questions we want to
ask.
Donella H. Meadows
Thinking in Systems

There are perspectives

A system is a way of looking at the world.
Gerald M. Weinberg
Introduction to General Systems Thinking

The term complexity does not explain only one kind

of system behavior; it means a set of characteris5cs that
one can iden5fy in most natural systems, including
organiza5ons and their processes. Dolan, Garcia, & Auerbach, 2003

Systems depend on context

The boundaries of systems keep shifting,
using reductionism and holism.
How much to abstract or extend depends on
what you want to understand.

The immediate,
local inten5ons of
interac5ng agents
are con5nually
emerging in a
context.
Grin, Shaw, & Stacey, 1999

Brains, bacteria, immune systems, the Internet,

countries, gardens, cities, beehives
Theyre all complex adaptive systems.

Reductionism
Holism

The corporate Zen, as it were,

involves not merely recognizing
nonlinearity, it entails being
nonlinear. Daneke, 1997

Complexity Theory

Models
Complexity Thinking
Example
Final words

To deal successfully with complexity...means to be embroiled

in constant processes of change. Dolan, Garcia, & Auerbach, 2003

A team is a complex adaptive system (CAS), because it

consists of parts (people) that form a system (team),
and the system shows complex behavior while it keeps
adapting to a changing environment.

One perspective
The properties of complex adaptive systems are:

Aggregation
Nonlinearity
Flows
Diversity

John H. Holland
Hidden Order

Of course,
all these are
just abstrac5ons.

Another perspective
There are six notions in complexity theory:

Sensitivity to initial conditions (butterfly effect)

Strange attractors (unpredictability)
Self-similarity (fractals)
Self-organization (distributed control)
The edge of chaos (emergence)
Fitness landscapes (continuous improvement)

Michael C. Jackson
Systems Thinking: Creative Holism for Managers

Complexity theory is about change

Complexity theory is not a cohesive theory.
It is not one equation. It is really a collection of
ideas about the concept of change in
complex adaptive systems []. It talks about the
dynamics of change in a system.
Irene Sanders
The Interaction of Complexity and Management

People and relationships

We found that this new science leads to a
new theory of business that places people and
relationships [] into dramatic relief.
Roger Lewin, Birute Regine
The Interaction of Complexity and Management

[All graphs and illustra5ons by Jurgen Appelo.]

You can try to simplify a system to make it understandable

But you cannot linearize the system to make it predictable

...We are in dynamic reac5on with our

environment and are very much part of the
process that creates that environment. Keene, 2000
Important: Complexity theory explains
why complex problems need
mul*ple perspec*ves.
(It is successful in explaining its own
failure at being a unied theory.)
This is all great, but
how do we use all
these ideas about
complexity

Reductionism
Holism
Complexity Theory

Models
Complexity Thinking
Example
Final words

....We may begin to realize

the importance of vision,
values, and guiding principles
of the organiza5on as the
steering mechanism for the
organiza5on. Keene, 2000

model
model noun \m-dl\

a usually miniature representation of something

a description or analogy used to help visualize
something (as an atom) that cannot be directly
observed
a system of postulates, data, and inferences
presented as a mathematical description of an
entity or state of affairs
http://www.merriam-webster.com/dictionary/model

We use models for two reasons

Steve Phelan
The Interac5on of Complexity
and Management

Confirmatory models: prediction & control

Exploratory models: insight & understanding
Steve Phelan

Conrmatory models are impossible to make in complexity theory.

But we can use exploratory models to aid in sense-making.

Making sense of improvement

http://en.wikipedia.org/wiki/PDCA
http://gumption.typepad.com/blog/entrepreneuria/

the world (insight and understanding)?

Models are never perfect

All models wrong, some are useful.
George Box

Usefulness is context-dependent. It depends

on the people and their environment.

The primary criterion for a useful model:

Does the model help people in a local context make sense

of the world by fostering insight and understanding?

metaphor
metaphor noun \me-t-fr also -fr\

a figure of speech in which a word or phrase literally

denoting one kind of object or idea is used in place
of another to suggest a likeness or analogy between
them
http://www.merriam-webster.com/dictionary/metaphor

Metaphors in science
Though very useful,
metaphors are the
weakest of all models
& tend to fail quickly.

Butterfy Effect
Edge of Chaos
Survival of the Fittest
Metaphors are fuzzy but effective models.

Metaphors in management

organizations as machines;
organizations as organisms;
organizations as brains;
organizations as flux and transformation;
organizations as cultures;
organizations as political systems;
organizations as psychic prisons;
organizations as instruments of domination;
organizations as carnivals.

Michael C. Jackson

Gareth Morgan
Images of Organiza5ons

Scien5c Management (Taylorism):

Systems Thinking: Creative Holism for Managers

Applying math to organiza5ons to improve

eciency, reduce variability, & add predictability.

The Scientific Method

The traditional approach...
1.
2.
3.
4.

Observations
Hypotheses
Predictions
Experiments

Complexity theory
predicts that we
cannot rely on
predic5ons,
which creates
new problems....

http://en.wikipedia.org/wiki/Scientific_method

Complexity invalidates prediction!

The crucial problem which science faces is
its ability to cope with complexity.
Peter Checkland
Systems Thinking, Systems Practice

Problem: prediction & control

For systems dynamics thinkers, the aim is to
identify leverage points for interventions that
will enable them to identify where, when and
how to initiate change and so stay in control.
However, the ability to do this in a system that is
sensitive to tiny changes is called into question.
That obviously has serious implications for the
human ability to stay in control.
Ralph Stacey
Complexity and Organizational Reality

....Knowledge crea5on is a process which

cannot be controlled or managed from outside
of that process.... Grin, Shaw, & Stacey, 1999

A key point of complexity theory

Multiple weak models can make just as much
sense as one strong model. (And its certainly
better than no models.)
In the end all models fail.
A single perspec5ve is not enough!

Reductionism
Holism
Complexity Theory

Models
Complexity Thinking
Example
Final words

....Even if the future is virtually

unknowable, nonlinear science can make it
a good deal more manageable. Daneke, 1997

Comparison between a Tradi5onal

and a Complex Approach
From Dolan, Garcia, & Auerbach, 2003

Tradi5onal Approach

Complexity Approach

Linear, predictable
Reduc5onism
Control
Uniformity, homeostasis
Aristotles Logic

Non-linear, unpredictable
Holism, Fractal
Chaos, self-organizing
Catastrophic change
Fuzzy Logic

...Disorder plays a key role in the crea5on of

new and higher forms of order. Keene, 2000

1) Address complexity with complexity

The complexity of a system must be
adequate to the complexity of the environment
that it finds itself in.
Max Boisot
The Interaction of Complexity and Management

The human mind is more complex than tools

Use stories, metaphors, pictures
We also use
analogies, metaphors, and
other ways of making comparisons to develop
new ways of talking. Grin, Shaw, & Stacey, 1999

Narratives useful for sense-making

[Complexity thinkers] argue that complex
thinking is best accomplished in a narrative
mode of thinking rather than the propositional
thinking of the traditional scientific method. []
Both involve recursiveness, nonlinearity,
sensitive dependency on initial conditions,
indeterminacy, unpredictability and emergence.
Ralph Stacey
Complexity and Organizational Reality

The kind of storytelling I am alluding to is not that of completed

tales but narra5ve-in-the-making. Rather than sta5ng aims,
objec5ves, outcomes, roles as abstract generali5es, people use
a narra5ve mode. Patricia Shaw, Changing Conversa7ons in Organiza7ons

From reduction to absorption

Top-down rules reduce an organizations
ability to deal with variety.
John Seddon
Freedom from Command & Control

Reduction vs. Absorption

Complexity reduction entails getting to
understand the complexity and acting on it
directly, including attempting environmental
enactment. Complexity absorption entails
creating options and risk-hedging strategies.
Max Boisot
The Interaction of Complexity and Management

2) Use a diversity of models

Complexity itself is anti-methodology. It is
against "one size fits all."
Tom Petzinger
The Interaction of Complexity and Management

Multiple weak models can make just as much

sense as one strong model.

Multiple approaches

Different people and tools

Different metaphors and analogies
Different patterns and simulations
Different methods and practices

3) Assume dependence on context

Best practice is past practice.
Dave Snowden
The Interaction of Complexity and Management

Retrospective coherence
Any evidence provided will depend on the
period selected and the place in which the
events are occurring as well as other aspects of
context. It follows that any relationship anyone
identifies between a management action and an
outcome could have far more to do with a
particular time and place where the sample is
selected than anything else.
Ralph Stacey
Complexity and Organizational Reality

pattern

pattern noun \pa-trn\

a form or model proposed for imitation
a reliable sample of traits, acts, tendencies, or other
observable characteristics of a person, group, or
institution
a discernible coherent system based on the
intended interrelationship of component parts
http://www.merriam-webster.com/dictionary/pattern

Think of scenario planning on the part of the CIA or how

nancial analysts predict stock market ac5vity; paNerns help
us make sense of complexity. [Key point of Sustainably Eec7ve Management.]

4) Assume subjectivity and coevolution

The observer influences the system, and the
system influences the observer.
The people form the culture, and the culture
forms the people.

[In] the monolithic owing

and jamming of trac on a
crowded highway...paNerns of
interac5on, not centralized
control mechanisms, dictate
the progress of the whole.
Daneke, 1997

Think how trac apps and GPS change trac paNerns themselves.

5) Anticipate, adapt, explore

Anticipation
Looking forward, proactive, imagining improvement

Adaptation
Looking backward, reactive, responding to change

Exploration
Trying things out, safe-to-fail experiments

...It is on the boundaries of chaos that

most crea5vity occurs; where theres
no control, only self-governing
parameters or values [MBV] can be
established. Dolan, Garcia, Auerbach, 2003

6) Develop models in collaboration

Does thein
model
help people to make sense of
6) Develop models
collaboration
the world (insight and understanding)?
Does the model help people to make sense of
the world (insight and understanding)?

This explains the importance of large group interven5ons:

....It is only when a network operates...at the edge of chaos
that it is capable of evolving, that is, producing new paNerns
of rela5onship, new categories of agents. Grin, Shaw, & Stacey, 1999

1. Address complexity with complexity

In Summary
before
discussion)....
2. U(se
a diversity
of models

In Summary

3. Assume dependence on context

4. Assume subjec5vity and coevolu5on
5. An5cipate, adapt, and explore
6. Develop models in collabora5on

Through this approach we might address the four trends associated

with increased complexity and uncertainty:
!

Dolan, Garcia, Auerbach, 2003

1. The need for quality and customer orienta5on.

2. The need for professional autonomy and responsibility.
3. The need for transforma5onal leaders instead of bosses.
4. The need for aNer, more agile organiza5onal structures.

Reductionism
Holism
Complexity Theory

Models
Complexity Thinking

What workplace
examples of
complexity have
we experienced?

Example
Final words

Open discussion....

Reductionism
Holism
Complexity Theory

Models

Thank you!

Complexity Thinking
Example
Final words

We should not take our models too

seriously.
Gerald M. Weinberg
Introduction to Systems Thinking