How Complexity Is Adapting
Anyone who hasn't heard about complexity theory just wasn't paying enough attention in the late 1990s. For several years, some business thinkers viewed complexity as the next big paradigm-shifting management idea, especially for companies struggling with change. Seminars were organized, books and articles written, businesses launched, and software developed.
What happened to this trend? Did complexity just fizzle away, to be replaced by another flavor-of-the-month management idea? It's an interesting question with, appropriately, a complex answer.
For those who don't remember, complexity theory is largely the brainchild of a multidisciplinary group of scientists who often congregate at the Santa Fe Institute, a nonprofit research and education center. This constellation of deep thinkers focuses on the study of complex adaptive systems (CAS). "Basically," reports The Scientist magazine, "this is any system that exhibits random variation and selection, resulting in learning or evolution. A CAS can be microscopic, like the immune system or the central nervous system, it can be an organism that includes those systems, and it can even be a composite of such organisms, like a termite mound, an ecology, or an economy." Or it can be a corporation, according to many a business writer and consultant.
For businesses, there are two major potential applications of complexity theory. First, it can provide broad-based conceptual insights into how organizations behave, evolve, thrive and die. While the production of books on this subject may have slowed, it hasn't stopped. For example, in a new book called Surfing the Edge of Chaos, the authors argue that complexity theory has yielded four "bedrock" principles: that equilibrium in a CAS is a precursor to death, that CAS move toward the "edge of chaos" when confronted by a changing world, that the components of a CAS have the ability to self-organize, and that CAS can't be directed along a linear path. The authors show how these principles have been at work in five companies (British Petroleum, Hewlett-Packard, Monsanto, Royal Dutch/Shell and Sun Microsystems) and the U.S. Army.
The basic idea is that, by viewing organizations as complex adaptive systems, top managers can develop more effective strategies because they'll have a more realistic idea of how organizations work: that is, more like living systems than like machines. Royal Dutch/Shell, for instance, is reported to have successfully revitalized its operations by tapping into the "self-organizing" capacities of its frontline employees, a strategy that was more effective than its previous reorganization and downsizing initiatives.
The second major business application of complexity theory is less conceptual: the use of complexity research tools for solving nitty-gritty operational problems. Scientific American recently reported on how logjams in Southwest Airline's cargo operations were broken up by a strategy derived from an "agent-based model," a device of complexity researchers. The magazine reports, "Southwest turned to the Bios Group, founded in 1996 by Santa Fe Institute luminary Stuart A. Kauffman, to transform academic notions about complexity into practical know-how. Bios simulated Southwest's entire cargo operation to decipher so-called emergent behaviors and lever points – the key elements in complexity science." Bios put together a new cargo-routing strategy that dramatically reduced Southwest's freight-transfer rate.
This rather mundane application provides a clue as to what has happened with complexity. Rather than being ignored or forgotten, it's being quietly and sometimes subconsciously absorbed into business culture. A case in point: many managers now understand that equilibrium is dangerous to their companies even if they don't recognize this as a principle of complexity theory. As for complexity tools, many "have essentially become mainstream and integrated into product suites, so they are not nearly as visible anymore," explains William F. Fulkerson, an analyst at Deere & Co. and one of the first people to use such tools to solve business logistics problems.
====================================================
A recent Scientific American article describes how complexity- based software applications are being used by business:
http://www.sciam.com/2001/0101issue/0101techbus1.html
To read summaries of several complexity-based articles published in the MIT Sloan Management Review, please see the following:
http://mitsloan.mit.edu/smr/past/1999/smr4038.html
http://mitsloan.mit.edu/smr/past/1999/smr4039.html
http://mitsloan.mit.edu/smr/past/1999/smr4036.html
For more information about the Santa Fe Institute, see
http://www.santafe.edu/
For a large number of links to sources on complexity, see
http://www.brint.com/Systems.htm
learn more about the "softer side" of complexity theory, see
http://www.bizspirit.com/bsj/archives/lewin2.html
What happened to this trend? Did complexity just fizzle away, to be replaced by another flavor-of-the-month management idea? It's an interesting question with, appropriately, a complex answer.
For those who don't remember, complexity theory is largely the brainchild of a multidisciplinary group of scientists who often congregate at the Santa Fe Institute, a nonprofit research and education center. This constellation of deep thinkers focuses on the study of complex adaptive systems (CAS). "Basically," reports The Scientist magazine, "this is any system that exhibits random variation and selection, resulting in learning or evolution. A CAS can be microscopic, like the immune system or the central nervous system, it can be an organism that includes those systems, and it can even be a composite of such organisms, like a termite mound, an ecology, or an economy." Or it can be a corporation, according to many a business writer and consultant.
For businesses, there are two major potential applications of complexity theory. First, it can provide broad-based conceptual insights into how organizations behave, evolve, thrive and die. While the production of books on this subject may have slowed, it hasn't stopped. For example, in a new book called Surfing the Edge of Chaos, the authors argue that complexity theory has yielded four "bedrock" principles: that equilibrium in a CAS is a precursor to death, that CAS move toward the "edge of chaos" when confronted by a changing world, that the components of a CAS have the ability to self-organize, and that CAS can't be directed along a linear path. The authors show how these principles have been at work in five companies (British Petroleum, Hewlett-Packard, Monsanto, Royal Dutch/Shell and Sun Microsystems) and the U.S. Army.
The basic idea is that, by viewing organizations as complex adaptive systems, top managers can develop more effective strategies because they'll have a more realistic idea of how organizations work: that is, more like living systems than like machines. Royal Dutch/Shell, for instance, is reported to have successfully revitalized its operations by tapping into the "self-organizing" capacities of its frontline employees, a strategy that was more effective than its previous reorganization and downsizing initiatives.
The second major business application of complexity theory is less conceptual: the use of complexity research tools for solving nitty-gritty operational problems. Scientific American recently reported on how logjams in Southwest Airline's cargo operations were broken up by a strategy derived from an "agent-based model," a device of complexity researchers. The magazine reports, "Southwest turned to the Bios Group, founded in 1996 by Santa Fe Institute luminary Stuart A. Kauffman, to transform academic notions about complexity into practical know-how. Bios simulated Southwest's entire cargo operation to decipher so-called emergent behaviors and lever points – the key elements in complexity science." Bios put together a new cargo-routing strategy that dramatically reduced Southwest's freight-transfer rate.
This rather mundane application provides a clue as to what has happened with complexity. Rather than being ignored or forgotten, it's being quietly and sometimes subconsciously absorbed into business culture. A case in point: many managers now understand that equilibrium is dangerous to their companies even if they don't recognize this as a principle of complexity theory. As for complexity tools, many "have essentially become mainstream and integrated into product suites, so they are not nearly as visible anymore," explains William F. Fulkerson, an analyst at Deere & Co. and one of the first people to use such tools to solve business logistics problems.
====================================================
A recent Scientific American article describes how complexity- based software applications are being used by business:
http://www.sciam.com/2001/0101issue/0101techbus1.html
To read summaries of several complexity-based articles published in the MIT Sloan Management Review, please see the following:
http://mitsloan.mit.edu/smr/past/1999/smr4038.html
http://mitsloan.mit.edu/smr/past/1999/smr4039.html
http://mitsloan.mit.edu/smr/past/1999/smr4036.html
For more information about the Santa Fe Institute, see
http://www.santafe.edu/
For a large number of links to sources on complexity, see
http://www.brint.com/Systems.htm
learn more about the "softer side" of complexity theory, see
http://www.bizspirit.com/bsj/archives/lewin2.html