A very useful list from Dave Snowden which can be used to describe good tactics for dealing with complex situations:
- The whole success of social computing is because it conforms to the three heuristics of complex systems: finely grained objects, distributed cognition & disintermediation
- In an uncertain world we need fast, real time feedbacks not linear processes and criticism includes short cycle experimental processes which remain linear.
- The real dangers are retrospective coherence and premature convergence
- Narrative is vital, but story-telling is at best ambiguous
- Need to shift from thinking about drivers to modulators
- You can’t eliminate cognitive bias, you work with it
- Extrinsic rewards destroy intrinsic motivation
- Messy coherence is the essence of managing complexity
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Inspired post by Dave Pollard today on the challenge of scale and the confusion of control. Complicated systems require few connections in order to be manageable:
It is because business and government systems are wedded to the orthodoxy of hierarchy that as they become larger and larger (which such systems tend to do) they become more and more dysfunctional. Simply put, complicated hierarchical systems don’t scale. That is why we have runaway bureaucracy, governments that everyone hates, and the massive, bloated and inept Department of Homeland Security.
But, you say, what about “economies of scale”? Why are we constantly merging municipalities and countries and corporations together into larger and ever-more-efficient megaliths? Why is the mantra of business “bigger is better”?
The simple answer is that there are no economies of scale. In fact, there are inherent diseconomies of scale in complicated systems. When you double the number of nodes (people, departments, companies, locations or whatever) in a complicated system you quadruple the number of connections between them that have to be managed. And each “connection” between people in an organization has a number of ‘costly’ attributes: information exchange (“know-what”), training (“know-how”), relationships (“know-who”), collaboration/coordination, and decision-making. That is why large corporations have to establish command-and-control structures that discourage or prohibit connection between people working at the same level of the hierarchy, and between people working in different departments.
Why do we continue to believe such economies of scale exist? The illustration above shows what appears to happen when an organization becomes a hierarchy. In the top drawing, two 5-person organizations with 10 people between them have a total of 20 connections between them. But if they go hierarchical, the total number of connections to be ‘managed’ drops from 20 to 8. Similarly, a 10-person co-op has a total of 45 connections to ‘manage’, but if it goes hierarchical, this number drops to just 9.
This is clearly ‘efficient’, but it is highly ineffective. The drop in connections means less exchange of useful information peer-to-peer and cross-department, less peer and cross-functional learning, less knowledge of who does what well, less trust, less collaboration, less informed decision-making, less creative improvisation, and, as the number of layers in the hierarchy increases, more chance of communication errors and gaps.
But, what about complex systems?
So back to the purpose of this post, to answer these questions: 1. What is it about the ‘organization’ of the Internet that has allowed it to thrive despite its massive size and lack of hierarchy? And: 2. What if we allowed everything to be run as a ‘wirearchy’?
To answer the first question, the Internet is a “world of ends“, where the important things happen at the edges – and everything is an edge. “The Internet isn’t a thing, it’s an agreement”. And that agreement is constantly being renegotiated peer-to-peer along the edges. If you look at the diagram above of the co-op with the 45 connections, you’ll notice that the nodes are all at the circumference – around the edges. There is no ‘centre’, no ‘top’. And the reason the organization isn’t weighed down by all those connections is that they’re self-managed, not hierarchically managed. The work of identifying which relationships and connections to build and grow and maintain is dispersed to the nodes themselves – and they’re the ones who know which ones to focus on. That’s why the Internet can be so massive, and get infinitely larger, without falling apart. No one is in control; no one needs to hold it together. It’s a model of complexity. And, like nature, like an ecosystem, it is much more resilient than a complicated system, more effective, and boundary-less. And, like nature, that resilience and effectiveness comes at a price – it is less ‘efficient’ than a complicated system, full of redundancy and evolution and failure and learning. But that’s exactly why it works.
via What If Everything Ran Like the Internet? « how to save the world.
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Richard Straub writes in the Harvard Business Review, on a great piece about what stops managers from adopting complexity views:
Complexity wasnt a convenient reality given managers desire for control. The promise of applying complexity science to business has undoubtedly been held up by managers reluctance to see the world as it is. Where complexity exists, managers have always created models and mechanisms that wish it away. It is much easier to make decisions with fewer variables and a straightforward understanding of cause-and-effect. Here, the shareholder value philosophy, which determines so much of how our corporations operate these days, is the perfect example. Placing a rigid priority on maximizing shareholder returns makes things clear for decision-makers and relieves them of considering difficult tradeoffs. Of course we know that constantly dialing down expenses and investments to boost short-term margins inevitably damages the long-term health of the company. It takes a complexity approach to keep competing values and priorities and the effects of decisions on all of them in view – and not just for management, but equally for investors, analysts, and regulators.
In the short term, a reductionist mindset is most useful for winnowing away externalities so that you can show that what YOU did had real results in the real world, thus justifying your value to the accountability chain and the shareholders.
via Why Managers Havent Embraced Complexity – Richard Straub – Harvard Business Review.
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Here on Bowen Island, we are still small enough and friendly enough that stuff like Bowen LIFT can get started relatively easily. Bowen LIFT is trying to help people self-organize transportation options to complement our limited but excellent public bus service. This morning on CBC Radio, our LIFTers got a lift of their own. Listen to the podcast here.
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It’s an old saw with me, but Dave Snowdon puts it very nicely and succinctly:
Numbers are good, but they are never the whole picture. Its easy to focus on them, they give the comfort of apparent objectivity and used to support human judgement they have high utility. The problem is when they replace judgement rather than supporting it. Of course in the ordered aspects of any enterprise statistics and numbers can do a lot of the work for you, but in a complex situation they can be dangerous. Applied to ordered aspects (boundary conditions, probes and the like) they have utility, but for the system as a whole they are more problematic.