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“I have no way of knowing whether the events that I am about to narrate are effects or causes.”
Jorge Luis Borges
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I have been talking about complexity, and building emergent agility, into business for quite some time. Yeah. Maybe I didn’t use exactly the same words as all the complexity folk today, but there were a bunch of us talking about it. The original seed was Toffler’s 1985 The Adaptative Corporation. I believe he recognized the shift occurring in business from standardization, mass everything (manufacturing, strategy, communications, etc) and drew a line in the sand between simple/replicable & complexity/dynamic. Yeah. It was a fuzzy line to me, but it felt right. Goldratt’s Theory of Constraints, taken literally, was about production and work flow. Taken figuratively, as many of us did, was about agility in a dynamic environment. It’s true they weren’t speaking of Complexity Theory, but they were clearly talking about how to conduct business in a constantly changing dynamic marketplace. Mintzberg dumped his book, Rise and Fall of Strategic Planning, in our laps in mid-1990’s drawing some clearer lines on emergent strategy in meeting the needs of a dynamic marketplace <i.e., thinking in a complex environment>. Once again. he didn’t invest a lot of energy on the idea of complexity <even though that’s what it is about>. Toffler cranked out three more books which if you didn’t have your head up your ass clearly showcased a complex world where the way business traditionally being conducted was going to be screwed. Some of us paid attention and started tweaking from within businesses. Then around 2000. Cluetrain Manifesto (meta view) explained complexity in a way we all could understand. The New Marketing Manifesto (marketing view), while about marketing explained complexity in a way we would understand. Carse’s Finite and Infinite Games (complexity humanized into behavior). Peter’s Thriving in Chaos (management view – albeit the only time he mentions complexity it is to encourage keeping things simple) explained complexity in a way any business could understand. And a little bit later, Rozenweig’s The Halo Effect, sealed the deal for us complexity embracers as well as The Culture Code by Rapaille nailed down some heuristic narrative making concepts to unlock understandable <Rapaille was a bit of a nutjob but his heuristic ‘codes’ are a fabulous narrative concept>. To us, complexity just was, not a theory, and while cause & effect <or linear relationships> did exist, we understood the consequences of those linear relationships were vectored.
** note: the distinction between linear activity <a specific action creating a specific outcome> and linear consequences <which is a probability causal calculation> is an incredibly important one I believe complexity theorists overlook when dealing with business which is in the business of doing business, not theory>. linear activity exists, even in complexity, linear consequences are rare.
If you were paying attention, and felt like the existing business construct and way of working felt flawed, all these books and ideas were planting seeds in your mind.
Eventually we navigated complexity embracing a number of principles:
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Situational awareness: a SWOT established a benchmark but once completed most of us made it a rolling roadmap reflecting present status. It was straddling past, present & future while assessing resources available. This was the easiest part because a SWOT made even the most ‘stick with the 5-year plan’ people feel at least slightly comfortable with diverging from the plan.
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Coherence over consistency: you encouraged some freer thinking, some continuous improvement <using
…. Value Creation of Possibilities: Emergence over Predictive ….
Goldratt always eased C-level concerns> and got people believing that sometimes better outcomes could be achieved with some adapting or agility. This one was more difficult because, even with Goldratt in our hip pockets, consistency is business’s heroin.
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Context was everything: the only way to kill a best practice/formula response or activity was to deconstruct the context in which it would be successful – and point out the current context wasn’t applicable. This one was time consuming, energy sapping and unless you had some scenario planning skills was fraught with peril.
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Probabilistic thinking: once you have even taken a half step into believing in complexity you know predicting anything is absurd. This is where you need a C-suite support system (or in the case of edge employees, managers) because in the good ole days not promising specific results against specific objectives was like committing Hari Kari. You needed someone else in the room to absorb some of the risk.
These were principles of which our successes resided on a wide continuum because the world we were working in, for the most part, wasn’t exactly in sync with what we were thinking. That didn’t mean we didn’t have some wins, just that to a ‘purist’ complexity person it may not look that way. We learned some hard lessons along the way.
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You need generalists.
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You need people who can think spatially (or conceptually).
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You need creative thinkers (and they could be found in any department).
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You need a CFO who ran a flexible balance sheet (you didn’t really need other budget-owner buy-in because in those days any budget owner always had money stored away in some rainy-day bucket if you had a good idea).
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You need at least one C-suite person who liked pursuing emergent opportunities (& could understand emergent strategies in a timely fashion).
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You need both emergent and predictable/replicable (the %’s can vary depending on organizational palate).
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You need some restless people (adventurers or people in a ‘state of perpetual dissatisfaction’).
** note: I’d be remiss if I didn’t point out none of the books I listed nor all the lessons learned gave clarity on complexity immediately. Each, and all, were disparate puzzle pieces we slowly accumulated in our heads until at some point the puzzle itself became clear. The books, in particular, didn’t always make sense at the time, but they all resonated in a way that made us think “there is sense in this.”
In the good old days when you got this right you not only created a business constantly adapting, but you were surrounded by groups of curious, restless, thinking, people. I will suggest in those days that was the satisfaction because most likely, as you introduced complexity-like things into business in a business environment focused on replicable, simple & uncomplicated, you got things fed back to you like a co-worker said to me when I was at JWT – “you have your own way of doing things” <kind of a backhanded way to say they thought it was an unusual way to create positive results>. That said. When you got it right you not only created some good business stuff, but the people you worked with tended to take aspects of business complexity thinking wherever they went – and found success.
Anyway. I have watched people as they have come around to the Complexity side of the world watching as they toss aside the simplistic view of Occam’s’ Razor and Steve Jobs ‘simple mantra’. Heck. I went through the Complexity Rabbit Hole myself.
….. The Complexity Rabbit Hole ….
Business loves certainty and evenness and has embedded that type of thinking into everyone so the initial grasp of complexity is one of excitement and, well, some uncertainty. The crux of complexity is found in lack of predictability (oh my). This rubs up against a feeling of lack of control or a constant state of liminalness (oh my). The natural reaction to that is to find ways to control or find concrete solid things to create some construct<within complexity>. So, in the good ole days it was milestones and clear short-term objectives which then turned into sprints, scrum and Agile Manifesto tools. We would be naive to think that these weren’t methods we sought to control aspects of complexity. This journey all leads to a place in which you embrace complexity and emergence and realize that navigating complexity resides not in any framework or methodology or even some really good everyday management tools – it is in humans and how they think. Conducting business, strategy & tactics, against Emergence is an art and skill which I call ‘conceptual thinking’ <which is most likely a derivative of sensemaking and meaning making or critical thinking>. Conceptual thinking embraces complexity, acknowledges aspects of complexity theory (the ones that pertain most to the business of doing business) and suggests continuous learning. Going back to an earlier point, this is all valuable for the future success of a business in a dynamic marketplace, but much of it becomes moot if the business model itself doesn’t change from a traditional hierarchy or command/control-ish construct.
This is to suggest embracing complexity is an unfolding process which we all go through. I’d suggest it is finding a comfort level between infinite and finite or maybe risk and certainty. The depths of the complexity rabbit hole can almost make you feel like nothing you do can mean anything and, from a human perspective that not only seems meaningless in some ways, but also chafes against a natural desire of productivity (proof). Therein lies the rub. Complexity Theory doesn’t have to worry about ‘meaning’, business does.
Look.
I have written about complexity in business for over a decade (maybe two). And while, today, I talk about complexity, complexity theory and, specifically, business, I am not associated with the Santa Fe Institute (but have invested time reading their thoughts on complexity theory), not part of the Cynefin community (but have read about and follow several on twitter), nor am I a complexity expert. But I do understand business and I do understand complexity in a dynamic business environment. Some of my thoughts may not align with some traditional thinking, and parts may, but I will remind everyone, when discussing business and complexity, it is about doing the business of doing business within complexity wherein the business is the priority, not some Complexity Theory. In addition. I also remind everyone “perhaps because the field has attracted researchers from a wide diversity of home disciplines, there is no consensus as to how to define, measure, describe or interpret “complexity.” <Steve Maguire, The Interaction of Complexity and Management> Read on. Think. Disagree if you wish. But everything I will offer is grounded in the pragmatism that within complexity <world, industry, company, humans> business needs to do business in a way that optimizes the dynamics of complexity and minimizes confusion complexity discussions sometimes seem to create.
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I believe complexity just is. Period. It is the system in which all businesses work within. All dynamics are simply the dynamics of systems – institutions, people, process, automation, technology, society, culture (inside & out of a business), community (inside & out of a business), global, etc. – interacting with each other.
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I believe complexity is expansive in nature, not reductive. Therefore the objective of navigating complexity is always to unlock its potential, not ‘reduce complexity.’
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I believe there are linear aspects within complexity and there are causal relationships. In fact, I have argued insights are often found within these ‘fractal’ connections , i.e., solving the fractal releases complexity potential.
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I believe complications exist within complexity and not all complications are created equal. In fact, complications exist as the normal, either human created or natural creations of dynamics, consequence of complex system.
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I believe being able to discern what is a human-made complication and what is a natural-system-made complication is often one of the most critical things in deciding what a business wants to do with a complication.
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I believe there is a difference between complicated and complication. A process can be complicated and, yet, effective and even efficient. I believe a complication occurs when the ‘complicated’ becomes an issue to the effectiveness, or efficacy, of a system.
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I believe not all complications need to be resolved.
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I believe many systems work, in totality, quite effectively with complicated parts and even some complications.
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I believe Chaos does not occur in 99.9% (I made up that % to make a point) of businesses and I do not believe it is helpful to suggest chaos as a feature, or a bug, of business.
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I believe many successful businesses can edge close to chaos, I actually call it ‘the bedlam stage’, but it is simply patterns yet to be identified, but patterns nonetheless.
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I believe, to quote The Santa Fe Institute “we are not ants nor are we bees”, to quote Dave Snowden (22:50 in this fabulous talk ) “industrialization at scale is a real problem in leadership and management”, to quote Alvin Toffler “the future belongs to the company who can de-standardize” and to quote me “the natural arc of business leadership bends toward evenness, predictability and replication.” I imagine I state this because I believe frameworks, quadrants, formula-thinking formats, will only be counterproductive to the natural dynamics of complexity (which are not nice & neat) because business, invariably, will take a framework and make it a process.
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I believe complexity shouldn’t be discussed as a theory, but as a reality.
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I believe complexity in business cannot be discussed without discussing business models.
** note: conceptual thinking, or sensemaking/meaning making, needs a malleable organizational structure or business model in order to maximize its effectiveness and, I would argue, make adoption of that thinking pervasive in an organization. I worked with P&G as Design Thinking was implemented and I watched as a business model, and institutional debt, constrained the possibilities.
That said.
Let me share my biggest issue with where I believe complexity discussions in business tends to struggle – infinite. Complexity becomes, well, complex when in theory. When everything is connected with everything, and, conceptually, nothing is causal (which, in practicality, is untrue in the doing of doing business), and consequences are found in probabilities not predictions, the whole seems infinite and infinite seems overwhelming (sometimes hopeless). The main consequence of this overwhelming and hopelessness is that simplistic models that define well enough to help make, not inform, a decision win (even if they do not explain truth). The next, almost as important consequence, is complexity increases the sense of pressure (to not only make a decision but that each decision carries a larger burden of consequences) so in order to appear (be) decisive most people will justify ‘right choice’ by selectively using data from dashboards. Going back to where I began, complexity just is. Its like living within a universe with some different gravities here and there, but, the important things remain the important things no matter where you go in the universe. Complexity shouldn’t increase stress, but rather offer freedom. And this is where I believe complexity folk need to get a grip. In a business world, to most business decisionmakers, possibilities are not infinite. In fact, they are clearly finite. Time, resources, information and people within any given situation represent a finite set of possibilities. Not infinite, finite. And within that finite sphere someone has to assess, most likely through some probabilistic thinking, what to do in that particular finite sphere. Within the business of doing business, pragmatically, people need to be doing shit not noodling some infinite set of complex dynamics.
I am at my core a pragmatic business person. I love theory because it stimulates thinking, but in the end, business is about taking action and doing things (hopefully productive things enhanced by the theory thinking). Complexity, complexity theory, complexity discussions, are really important discussions because accepting business is complex is the first step toward navigating complexity (rather than building simplistic solutions and aiming for the wrong things). But discussing complexity always runs the risk of becoming a rabbit hole discussion in which it becomes impossible to make choices (because it is difficult to wrap your head around making sense of things). What I mean by that is if, within complexity, everything is connected with everything, and nothing is causal, consequences are found in probabilities not predictions, the whole not only becomes nebulous, but actually infinite. And while business people love talking about infinite possibilities, pragmatically (once again), infinite thinking does absolutely zero good to everyday business and decision-making. It is overwhelming and can often make decision-making seem like a hopeless effort therefore the default becomes ‘just check the task off the list’.
Once again, the truth is that in any given situation while the outlines may be vague, the choices are actually finite, not infinite.
I bludgeon all of you with all that repetitive thinking because the truth is that discussing complexity does not occur in a void, but rather needs to be discussed within a framework within which business, all people in the organization, can envision as a way of doing business – not just of how they are now doing business.
In other words, I believe most businesses recognize that decision-making needs to be dispersed within organizations more so than it currently is (this ‘dispersed’ is relative to its current status of distributed decision making). So, any discussion of complexity theory, in a practical sense, needs to keep an eye on the fact everything will be shifting out toward the edges of a business and many people who have never been expected to think conceptually, make many of these types of decisions or even ‘see’ the kinds of cues an emergent opportunity offers someone. I am certainly not suggesting things need to be ‘dumbed down’, but I am suggesting any theory needs a good dose of pragmatism.
Here is one thing I know for sure. Business has a nasty habit of turning the positive complex into the negative complicated. That is just what business does and if anything needs to be ‘transformed’, it would be that. I would suggest business will not be transformed by understanding complexity just as it is not really transformed by technology. Business will be, as it has been forever, transformed by people – people thinking clearly, conceptually and critically within situations they are placed. This isn’t to suggest part of developing a learning organization shouldn’t be learning some skills and beliefs which can enhance their success in navigating a dynamic business world, it is simply to suggest, in the end, success will be found in people working with people and people talking with people and people innovating with people.
Personally, I think we need to get this entire Complexity discussion right. Why? People spend about 1/3 of their lives working (or in a workplace). Businesses, generally speaking, spend 100% of their business either integrating with the world (gathering resources) or with people (exchanging the resources they have used). In other words, quoting Drucker, business, and its people, are in and of society. I would be remiss if I didn’t point out society, or humankind, is actually a complex dynamic marketplace of its own. I would also be remiss if I didn’t point out most of Humankind does not have the structure/boundaries a business has. That last point is relevant because most people, in society, are also struggling to navigate complexity (most of whom had been taught in school some fairly causal things). I imagine my larger point is humankind benefits if the business word has its shit together on complexity learning. Probabilities, emergent strategies, complications versus complicated, agility, situational awareness, all are invaluable learnings for successfully navigating life – self, community, country & world. It’s quite possible I am being too dramatic in my view of the scope, but it’s possible I am not. So, for all the complexity people out there, what are the probabilities if we get this right? No predictions, just is the probability of positive effect on Humankind worth getting this right.
Maybe I say this because I bang on Cynefin, & I shouldn’t. They are simply a part of the puzzle we all need to solve. The truth is I am a ‘mutt thinker.’ When I speak of complexity in business, I don’t really have a single framework and I pluck out the aspects of Learning Organizations (which I tend to believe is the larger vision), Senge, Pflaeging/Hermann OpenSpace, Lisa Gill’s thinking on flat organizations, Leloux, Drucker, Goldratt, Stacy, Ackoff, Deming, Mary Parker Follett of course (my business guiding light), the military (who most likely embraced individual conceptual thinking earlier than most of us – simply out of survival), Jason Fox, Mintzberg, John Grant, even The Santa Fe Institute <their collection of essays, “Worlds Hidden in Plain Sight” is fabulous learning fodder>, and finally the two sources who sealed my meta view on this whole complexity thing – Cluetrain Manifesto and the person who planted the seed of complexity thought – Alvin Toffler.
Complexity is, well, complex. The one thing I believe all Complexity people can agree on is the importance of words and narratives. From Toffler to the present the constant theme has been stories, storytelling, metaphors, codes and the use of words. At some point, at least in the business sphere, I believe it would be helpful if there could be some common agreement on definitions, narratives and words. Why? Well. To go back to maybe my most important thought – business is in, and of, society. It behooves us to get that right because, in the end, while I am in the business of doing business, to think we can help the greater humankind think just a bit better every day, and maybe that helps society progress a little bit better every day, is a way I think we make a dent in the universe.
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Postscript: I, personally, believe the future of business – embracing complexity – is a future business model within which technology augments people in a way that facilitates constant learning and conceptual thinking . i even have the draft of a book on this idea – combining complexity, people and technology. I, personally, believe any existing business could adopt a 100% emergent strategic outlook – people, left to their own emergent opportunities, will naturally build in the predictable/replicable parts out of some efficiency recognition.
That said. I could never have written The Adaptable Corporation, Cluetrain Manifesto, New Marketing Manifesto, Finite and Infinite Games as well as a slew of other books which have all fed my ‘mutt thinking.’ I highly recommend you read all of these books, as well as the newer book Agility (Tilman/Jacoby) which captures a lot of how I think, as well as any others I included in this piece. I would argue 99% of us will never have the answer, but 99% of us can find some answers in someone else’s thinking.