Genesis is the bi-monthly newsletter of Strategenis a change facilitation consultancy. The newsletter is intended to provide a forum for exploration of complexity, leadership, and group dynamics within human systems. It will provide a means to making sense of the emerging understanding about complexity and the practical challenges faced by leaders, teams and communities as they attempt to sustain the capacity to succeed in a dynamic environment.

The name genesis was chosen to the reflect the sense of beginning and emergence from initial conditions. Just as Lorenz explored how the flap of a butterfly wing in Brazil could lead to a tornado in Texas, our goal is that Genesis will start some great conversations.

Complex Adaptive Systems: An Introduction By Paul Mackey ©Strategenis

There can be no doubt that complexity is a characteristic of life in organizations. In recent years, new understandings have emerged around how organizations work as people have discovered shortfalls of the current mechanistic paradigm. This paradigm sees organizations structured primarily to achieve outcomes through the organization of work, driven by a leader developed vision, supported by strategic and business planning, and based on an assumption that a combination of centralized direction and performance management can effectively achieve goals. No debate, this has worked- but only to to a point. The context within which organizations live has changed dramatically. Globalization, the internet and wireless communication, the rise of the knowledge worker, and new sciences and technology have transformed the playing field. Organizations face rapid, continual and interconnected change characterized by unexpected outcomes and surprise. Individuals and organizations must have the agility to adjust to unforeseen threats and opportunities, to be responsive to multiple stakeholders, and to apply knowledge which no longer rests within the organization itself. New forms of organization have emerged which test the traditional boundaries of the organization. We only need to look at the growth of communities of practice, strategic alliances, collaborative projects, the use of contingent workforces and free agent consultants, the integration of supply chains, customer relationship management systems, competitive intelligence initiatives to recognize that the traditional hierarchically driven organization has had to adapt. With this, there is growing recognition that organizations display the characteristics of complex adaptive systems.

Complex adaptive systems theory builds on the research from many disciplines: quantum physics, biology, econ0mics, meteorology, general systems theory, and organizational development- to name a few. The study of these multi-discipline aspects of complexity is often called complexity science or complexity theory- names that send most of us looking for something which is a little bit more within our comfort zone! In each of these disciplines, researchers and theorists have recognized similar characteristics and patterns of behavior which take place “at the edge of chaos”, far from stability but not yet chaotic. This is the field of complexity- filled with surprise, uncertainty, non-linearity an unpredictability. And yet, it is here where a new inherent need for self-organization emerges-without the need for order imposed from a centralized command. It is here, where agents in the system interconnect in ways that new patterns emerge. In summary “complexity theory is oriented to understanding how interactive, dynamic systems, composed of highly interconnected, yet relatively independent component parts, behave in an orderly fashion” (Cole)

Some of the key concepts which have been identified as characteristic of complex adaptive systems are:

• the system is non-linear- sensitive to initial conditions. This means that a small input can lead to huge changes in outcome. For example, Lorenz demonstrated that minute changes in a mathematical simulation of the weather, lead, over time, to dramatically different results. This lead to the no famous concept of a butterfly flapping its wing leading to a tornado. Because of this sensitivity to initial conditions it was impossible to accurately and precisely predict local weather, even with sophisticated computers, over an long period.. In organizations a new addition to a project team can change the dynamics of the team in unpredictable ways.

• There are individual agents, each operating locally, with the freedom to act in ways that are not precisely predictable., Ant colonies harvest areas surrounding an ant hill in recognizable patterns which vary each day and yet each individual ant seems free to choose a path around an obstacle. People respond differently to career opportunities during an organizational change, mangers choose different approaches to solve problems or to realize strategies..

• the actions of agents are interconnected: the actions of one agent changes the context for the others. One need only observe how successful strategies are copied, unsuccessful ones abandoned when individuals respond to a newly installed top management team.

• patterns of behaviour emerge from this interaction- complex adaptive systems can self organize. Geese formations in flight and migration patterns are good examples of this. Individual birds choose the direction and are free to change and yet by following some simple rules , fly in a recognizable yet ever changing pattern. New properties emerge which are not evident within individual agents. In organizations, individuals following a set of simple rules can generate complex patterns of behaviour. For example, on the freeway, two simple rules 1. avoid collisions with other cars, and 2. travel at the same speed as others, can lead to some very complex traffic patterns.

• Over time, the rules of interaction can change – leading to different or new patterns of behaviour. Darwin's work on the origin of species recognized this, however new findings by Kauffman demonstrate that rather than waiting for new “ad hoc” mutations to meet the “survival of the fittest” test, the inherent tendency toward self organization helps to collapse the time needed for species to develop.

• Time is a significant variable. Because complex systems do not tend towards equilibrium – but are dynamic, the process of change in them is irreversible. When forces are removed, there is no initial equilibrium state to which the system can return. “the entities in the system are defined historically- in terms of the entire sequence of their interactions over a series of irreversible changes.” (Depew and Weber). In organizations, one can not reverse an organizational intervention and expect the organization to be the same as it was before.

• Although complex adaptive systems are unpredictable at the local and agent level, over time larger more holistic predictions are possible: It is difficult to precisely predict local weather seven days from now, it is still possible to recognize seasonal patterns and limits. We can predict a “probability” of rain for tomorrow, we are more certain however, that we will not have a snowstorm in the middle of summer. In organizations we may predict that a performance feedback session with an employee will have a short term impact, but we can not predict the impact of that discussion with the individual on their team. Still, we might reasonably expect that performance feedback routines used throughout an organization, over time, will change the overall performance of the organization.

• There is diversity among the agents in a complex adaptive system. Variety within a population is one of the the essential requirements of adaptation. eg.- mutations which permit evolution. Variety also helps systems resist threats such as viruses to the species. An organization in which all managers respond in the same way to new ideas may be slow to recognize threats or opportunities. Linux- an operating systems developed by a world wide network of volunteers and given away free has gained its strongest support “precisely for situations demanding high reliability” (Axelrod and Cohen p53.)

• Feedback loops Complexity within systems results from feedback to the component parts on how the system is responding. Individual agents need to be capable of receiving a signal and adapting to it. As indications of progress, success or failure are processed, the system adapts, creating new patterns of relationships between the parts of the system. New patterns emerge From these new relationships. We see organizations using performance measurement to monitor the achievement of strategies and to adapt strategies to changing conditions. Often the underlying assumption is that feeding performance information back to the system will change the behaviour of individuals in the organization. What we more often fail to see, is that the actual behavioural changes which the information brings may be unpredictable.

Clear analogies can be made from the characteristics of complex adaptive systems to the way in which people in organizations interact. While these analogies are useful as a new ways of understanding change, organizational development and leadership they also raise questions for future inquiry:

Is there an optimum complexity for organizations? Too much borders on the chaotic, too little stifles innovation and the development of new strategies.

Can the selectivity strategies observed in nature be applied to organizational decision making?

How permeable should the the boundaries of an organization be? When they are too permeable, harmful elements may enter and destroy a system which does not have sufficient diversity . On the other hand impermeable boundaries would eliminate adaptation. An organization which does not adapt is dead.

Genesis  welcomes comments and suggestions on these questions and others which you may have.   Discuss: Complex Adaptive Systems: An Introduction

Resources

Axelrod, Robert and Cohen, Michael D. Harnessing Complexity Organizational Implications of a Scientific Frontier, Basic Books. New York 2000.

Capra, Fritz The Web of Life, Harper Collins, London 1996

Cole, Ken “Globalization: understanding complexity” University of East Anglia, Norwich England June 2002.

Depew D J and Weber B H, “Consequences of No-equilibrium Thermodynamics for the Darwinian Tradition,” in Weber, Depew and Smith (1988)