Tuesday, September 14, 2010

The Reality of Complexity

This is a brief summary of two essays by Roger Lewin, The Reality of Complexity and Leading at the Edge: How Leaders Influence Complex Systems (coauthored with Birute Regine). Both of these essays refer to his two books on complexity, Weaving Complexity and Business: Engaging the Soul at Work, also coauthored with Birute Regine, and Complexity: Life at the Edge of Chaos.

In The Reality of Complexity, Lewin writes, “We argue that managers, consultants, entrepreneurs, executives, other business professionals indeed, anyone who works can take some comfort in the fact that they are not alone in riding a bucking bronco of change that demands a different understanding of the world. Science, too, is in the midst of an important intellectual shift, a true Kuhnian paradigm shift that parallels what is happening in business, or, more accurately, is the vanguard of that change. Where once the natural world was viewed as linear and mechanistic, where simple cause-and-effect solutions were expected to explain the complex phenomena of nature, scientists now realize that much of their world is nonlinear and organic, characterized by uncertainty and unpredictability. As in science, managers are discovering that their world is not linear but rather predominantly nonlinear, not mechanistic but rather organic and complex. It’s amazing how far we have been able to take the linear model for understanding the world, both in science and in business. But in the new economy, the limitations of the mechanistic model are becoming starkly apparent. A new way of thinking is required.

The realization that much of the world dances to nonlinear tunes has given birth to the new science of complexity, whose midwife was the power of modern computation, which for the first time allows complex processes to be studied. The science is still in its infancy, and is multifaceted, reflecting different avenues of study. The avenue most relevant to understanding organizational dynamics within companies and the web of economic activity among them is the study of complex adaptive systems. Simply defined, complex adaptive systems are composed of a diversity of agents that interact with each other, mutually affect each other, and in so doing generate novel behavior for the system as a whole, such as in evolution, ecosystems, and the human mind. But the pattern of behavior we see in these systems is not constant, because when a system’s environment changes, so does the behavior of its agents, and, as a result, so does the behavior of the system as a whole. In other words, the system is constantly adapting to the conditions around it. Over time, the system evolves through ceaseless adaptation.

Complexity scientists are learning about these dynamics of complex systems principally through computer models, but also through observation of the natural world. “That’s all fine and dandy for scientists and academicians,” one executive commented when we made this point, “but what’s it got to do with me and my problems?” The point is that business organizations are also complex adaptive systems. This means that what complexity scientists are learning about natural systems has the potential to illuminate the fundamental dynamics of business organizations, too. Companies in a fast-changing business environment need to be able to produce constant innovation, need to be constantly adapting, and be in a state of continual evolution, if they are to survive.”

He believes that relationships are the new bottom line. Not just who you are linked to but caring relationships driven by values. He notes, “We can restate this in the language of complexity science as follows: in complex adaptive systems, agents interact, and when they have a mutual effect on one another, something novel emerges. Anything that enhances these interactions will enhance the creativity and adaptability of the system. In human organizations this translates into agents as people, and interactions with mutual effect as being relationships that are grounded in a sense of mutuality: people share a mutual respect, and have a mutual influence and impact on each other. From this emerged genuine care. Care is not a thing but an action to be care-full to care about your work, to care for fellow workers, to care for the organization, to care about the community. We saw that genuine care enhanced the relationships in these companies, with CEOs engendering trust and loyalty in their people, and the people being more willing to contribute to the needs of the company. In the context of complexity science, care, which enhances relationships, in turn enhances companies’ creativity and adaptability.”

This is an extremely novel interpretation. We’ve had management based on science in the past with the result that people became abstracted to be a number and a replaceable cog in a machine. (Remember Charlie Chaplin’s Modern Times.) Now, complexity science may provide the justification for oft debated, human centered management.

“We can see, therefore, that management practice guided by complexity science leads us to a very human orientation, and this was a surprise, counterintuitive. Of course, there have been many human-centered approaches in management before, amongst the more notable being political scientist Mary Parker Follett’s work done in the 1920s and 1930s in the United States, in which there has been a recent resurgence of interest. For more than half a century, there has been a constant battle between human-oriented management and scientific or mechanistic management, with the latter prevailing. But it is only now, and for the first time, that there is a science behind this way of thinking that gives a legitimacy to the whole realm of human-centered management. With complexity science, we have human-oriented management practice emerging from science, a novelty.”

In Leading at the Edge, the authors write, “At the cusp of the twenty-first century, we are experiencing unprecedented structural shifts in our economy brought about by the revolutions in computation and communication technologies. Today the world is linked in ways unimaginable just a decade ago. A new kind of economy is emerging–the connected economy--a shift that rivals the onset of the Industrial Revolution in its impact on society and the way commerce is transacted. And with this shift, the business world finds itself in the throes of revolutionary change. Where once companies imagined themselves to be the master’s of their own destiny, in a connected economy companies find themselves as interdependent players in a fluid and vacillating economic web, where their fate, more than ever, is affected by the behavior of other members.

The change is not only real, but it is also accelerating, driven by rapid technological innovation, the globalization of business, and, not the least of it, the arrival of the Internet and the new domain of Internet commerce. Change–the pace of innovation, of forming and reforming alliances among companies, of corporate mergers, emerging markets–all driven by this connected economy, creates an environment of urgency in the workplace and a need to respond, adapt, anticipate that is unprecedented in the world of business as we knew it. Consequently, business leaders are preoccupied with change itself–how to generate it, how to respond to it, how to avoid being overcome by it. But, as Intel’s Andy Grove indicates, change is not exactly a welcome guest in business: "With all the rhetoric about change, the fact is that we managers hate change, especially when it involves us."

During these changing times, leaders and managers are finding many of their background assumptions and time-honored business models inadequate to help them understand what is going on, let alone how to deal with it. Where managers once operated with a Tayloresque mechanistic model of their world, which was predicated on linear thinking, control, and predictability, they now find themselves struggling with something more nonlinear, where limited control and a restricted ability to predict outcomes are the order of the day.

Consequently, many managers and executive professionals are uneasy and eagerly seeking new ways of dealing with change in their organizations, as the current $17 billion-a-year management consulting business would indicate. In the new connected economy, the limitations of the mechanistic model are becoming starkly apparent and a different mode of thinking is needed. In the connected economy of the twenty-first century, leaders cannot afford to try to succeed with management methods that were developed in a different age and for a different type of business environment.”

The authors conducted a study of organizations that exhibited some of the fundamental characteristics of a complexity science informed organization – “organizationally flat, have fewer levels of hierarchy, and promote open and plentiful communication and diversity. Complexity science argues that these properties enhance a system’s capacity for adaptability, thus, in the case of business, giving them a cutting edge in these fast-changing times. The companies we chose for our study therefore shared the properties of being organizationally flat and having rich, open communication. But we had no idea what we would find in the realm of organizational dynamics, of leadership and management style, and people’s work experience.

What we discovered was a style of leadership that unleashed enormous human potential in these organizations. We saw similar patterns among the leaders–CEOs, executive directors, chairmen, senior executives, managers–in how they worked with their business as a complex system. Because these patterns in leadership style emerged in companies of very different sizes and very different economic sectors, we infer that we are seeing something fundamental in how to lead change in organizations so that it is more adaptable and how to cultivate a culture in the workplace that is better able to embrace and create change.”

They found a way of leading change--an organic approach that is informed by complexity principles; and a style of leadership, paradoxical leadership that cultivates conditions for constructive change in organizations.

Later, the authors explain, “These elements of an organic approach for leading change are a different way of doing things in that these leaders didn’t make changes, they cultivated conditions for change to occur. Instead of implementing strategies or plans, they generated ambiguity and uncertainty, encouraged risks, attended to relationships which allowed the organization to rearrange itself. They engaged the whole person and forged connections between people which in turn made their organization more whole and connected.

If organizations are complex systems, leading in an interconnected, dynamic system requires a different way of being a leader. Leading in a dynamic system is more like an improvisational dance with the system rather than a mechanistic imperative of doing things to the system, as if it were an object that could be fixed. This casts the meaning of leadership itself in a different light that dispels certain beliefs and myths about what it means to be a leader in a traditional sense.”

The three myths of leadership that a complexity view dispels are autonomy, control, and omniscience.

The authors write, “What we have done is identify an intellectual framework, a scientific understanding of organizational dynamics that puts these behaviors under one umbrella of complexity, which shows why these behaviors are effective. We can see that these behaviors, such as mutuality and care, are efficacious in the business environment, not because being "nice" to people is a good and human thing to do, which, of course, it is; but because we are positively engaging the agents and the dynamics of the complex adaptive system, and moving the system toward the zone of creative adaptability.”

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