Biology of Business: Complex Adaptive Systems

The Biology of Business The Biology of Business 11 Simple Rules from Complex Adaptive Systems 11 Simple Rules from Complex Adaptive Systems Sharon VanderKaay Farrow Partnership Architects Inc.

pho Tye S. Farrow oto: Concepts from complexity science point the way to a healthier world for business, communities and individuals.

These concepts explain explain the dynamics of change in h i living systems that affect business success in a post‐industrial era.

A definition A definition Complex Adaptive Systems Complex Adaptive Systems are diverse living elements living elements made up of multiple interconnected agents interconnected agents that have the capacity to change and learn from change and learn from experience.

an@seewater.com Susa Ottevanger / susa Industrial Residue an 200+ years of industrial progress have left behind tangible liabilities such as toxic landfill…

oto.com / Grafissimo © iStockpho …as well as intangible liabilities such as such as self‐defeating ways of working. ways of working © iStockphoto.com / Dmitry Vasilyev D

@seewater.com Susan Ottevanger / susan@ We’ve become so O disconnected from the natural world that unregimented business practices can seem strange to us.

ry to.com / Jelani Memor …and these ways of © iStockphot working cause unnecessary distress.

change programs? strategy implementation? t t i l t ti ? Living Systems Mismatch performance reviews? Resources are Resources are wasted by © iStockphoto.com / Ola Dusegård diligently diligently O applying approaches approaches that have proven proven time after time misguided mergers? g g to FAIL. to FAIL. economic predictions?

Why do our change programs produce so little change? produce so little change? Living Systems Mismatch Why is it difficult to implement Resources are Resources are our strategic plan? wasted by Why do efforts to gain buy‐in Why do efforts to gain buy in diligently diligently frequently fail? applying approaches approaches Why does the ROI for mergers that have tend to be low? proven proven And why do so may headlines time after time about t e eco o y co ta t e about the economy contain the to FAIL. to FAIL. word “unexpected”?

@seewater.com Susan Ottevanger / susan@ O To resolve this mismatch there’s one basic “test” question we need to ask we need to ask ourselves daily…

n@seewater.com Susan Ottevanger / susan n …this question applies whether we’re aiming to ’ i i t save the planet or attempting to change one person’s opinion.

The test question is:

Am I working with or against nature?

© iStockphoto.com / © iStockphoto.co / © igor terekhov om WITH NATURE WITH NATURE AGAINST NATURE AGAINST NATURE p p purpose and boundaries tight, uniform control g , attract, work through impose, force feed open, flexible system closed, rigid system cooperate to create conditions for scarcity mindset y abundance solutions emerge / pre‐determined / expect surprises attempt to predict

an@seewater.com Susa Ottevanger / susa an Here are Here are 11 enabling rules that work that work with nature.

11 …these enabling rules g emerged from reflection on real, everyday business life with clients and colleagues g through the lens of complex adaptive systems. y

© Susan Ottevanger / susan@seewater.com 1. 1 n Pursue agility and resilience. (abandon illusions of predictability) Living systems present too many variables for us to rely on one assumed future scenario. “Life in beta”is Bruce Nussbaum’s¹ term for the notion of continuously sensing, interpreting and acting on shifting environmental conditions. acting on shifting environmental conditions.

2. Consciously learn from daily experience. (rather than rely on formal training) Step‐by‐step training prepares people for repetitive, judgment‐free procedures. But business skills such as sensing, sense‐making and taking appropriate action are improved through a process of inquiry and reflection on g p q y real, messy human experiences.

an@seewater.com 3. 3 © Susa Ottevanger / susa an Allow solutions to emerge. (look beyond existing pieces of the puzzle) Avoid jumping to answers and making assumptions based on direct cause and effect relationships. relationships. Instead, re‐frame questions to expand the p possibilities, then explore fast, cheap iterations , p , p in a process of experiment/learn/adjust/repeat until a better solution becomes apparent.

Strange Attractor St Att t 4. 4 Pull, don’t push. (avoid efforts to overcome resistance to ideas) Strange attractor is a term from chaos theory describing “points that remain close to the attractor even if slightly disturbed. attractor even if slightly disturbed ”² Scientists may wince at applying attractor to business, but this sticky term reminds us to business, but this sticky term reminds us to engage followers, influencers, and champions while avoiding contests aimed at control.

© Susan Ottevanger / susan@seewater.com 5. 5 n Seek healthy mixtures. (avoid monocultures like the plague) Biodiversity is a condition for survival. Sameness and replication are enemies of innovation. i i Diverse viewpoints lead to better solutions by challenging assumptions, reframing questions challenging assumptions reframing questions and avoiding self‐limiting either/or choices.

pho Tye S. Farrow 6. 6 oto: Establish a purpose and boundaries. (tight controls do more harm than good) Industrial era notions of control came about when people were viewed as extensions of machines. Pay attention to what Dan Pink says about motivation – Mastery! Purpose! Autonomy! (see Sources, slide #32)

© Susan Ottevanger / susan@seewater.com 7. 7 n Appreciate the messy phases. (innovation does not occur with clinical precision) The notion of self‐organization at the edge of chaos makes industrial‐minded administrators nervous. nervous But successful innovation happens when people g give up central planning and see beyond neat, p p g y , over‐simplified answers, then work through the disorder to create better solutions.

8. You may be here. Expect non‐linear progress. (there will be ups and downs) The creative process depends on the learning that emerges from each trial and error iteration. Instead of being surprised and daunted by a naturally bumpy process, it can be recognized as a progressive journey. This view is not a p g j y matter of positive thinking; it’s derived from the realities of adaptive systems.

@seewater.com 9. 9 © Susan Ottevanger / susan@ Cooperate to create abundance. (pure competition leads to scarcity) Machine age economics were based on assumptions of gain or loss, rather than interdependence. interdependence In natural, self‐organizing systems the well‐ being of any given organism is dependent g yg g p on the success of the larger whole.

10. 10 Promote grassroots initiatives. (see the weaknesses in top‐down programs) In contrast to top‐down programs that invite resistance, small self‐organizing experiments can be contagious, with higher impact. can be contagious with higher impact These outlier (or pilot) projects demonstrate a better way forward through positive deviance better way forward through positive deviance by mavericks who get things done.

11. 11 Work in a place designed for humans. (in contrast to restrictive, generic office spaces) Knowledge workers benefit from physical environments that recognize the changing biology of business. biology of business. This means creating spaces that inspire big ideas and facilitate the flow of various activities that take place in a day (instead of the old question: open or closed offices?).

1. Pursue agility and resilience. 2. Consciously learn from daily experience. 2 Consciously learn from daily experience 3. Allow solutions to emerge. These design thinking 4. Pull, don’t push. concepts are not new, concepts are not new yet examples of 5. Seek healthy mixtures. mechanical models mechanical models 6. Rely on vision and boundaries. and their 7. Appreciate the messy phases. negative consequences are evident in business 8. Expect non‐linear progress. all day, every day. y, y y 9. Cooperate to create abundance. 10. Promote grassroots initiatives. 10 Promote grassroots initiatives 11. Work in a place designed for humans.

Business must abandon summary comments “ efforts to craft the perfect p plan for the future. Alex & David Bennet Organizational Survival in the New World Because change is non‐linear, a small change can produce a large effect. Or a large change may produce no effect at all. Curt Lindberg Plexus Institute ...cannot be directed/controlled but can be influenced/disturbed. Henri Lipmanowicz Plexus Institute Mastery. Purpose. It s not a good time for control freaks. It’s not a good time for control freaks Eric Young quoted in Getting to Maybe by Westley, Zimmerman & Patton ” Autonomy. Autonomy Dan Pink Drive

credits + inspiration Plexus Institute http://www.plexusinstitute.org/ Plexus Institute http://www plexusinstitute org/ Complexity: The Emerging Science at the Edge of Order and Chaos by A. Mitchell Waldrop Drive: The Surprising Truth About What Motivates Drive: The Surprising Truth About What Motivates Us, by Dan Pink ¹ Bruce Nussbaum http://www.businessweek.com/innovate/Nussbaum OnDesign/archives/2009/11/life_in_beta h.html OnDesign/archives/2009/11/life in beta‐‐h html ² Wikipedia on “Attractors” http://en.wikipedia.org/wiki/Attractor y The Fortune Sellers by William A. Sherden Getting to Maybe by Frances Westley, Brenda Zimmerman & Michael Quinn Patton Managing the Unexpected: Assuring High Performance in an Age of Complexity b K l E P f i A fC l it by Karl E. Weick & Kathleen M. Sutcliffe Modern Times, the film artwork as noted: Susan Ottevanger artwork as noted: Susan Ottevanger www.seewater.com photos as noted: Tye Farrow

SIMPLE COMPLICATED COMPLEX baking a cake constructing a building baking a cake constructing a building sustaining a business or g raising a child LINEAR LINEAR EXPERTS COORDINATE MANY COORDINATE MANY INHERENT VARIETY and INSTRUCTIONS, SETS of INSTRUCTIONS to UNCERTAINTY in a DYNAMIC PREDICTABLE ACHIEVE a SPECIFIC OUTCOME ENVIRONMENT that requires OUTCOME continuous INTERPRETING continuous INTERPRETING and SENSING; may lead to SURPRISE PROJECT MANAGEMENT (e.g. to deliver construction documents) combines complicated + complex elements aimed at a reliable outcome bi li t d l l t i d t li bl t adapted from Getting to Maybe by Westley, Zimmerman & Patton

@seewater.com Susan Ottevanger / susan@ O …fresh possibilities for success emerge. Sharon VanderKaay y Farrow Partnership Architects www.farrowpartnership.com

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Biology of Business: Complex Adaptive Systems

by Farrow Partnership Architects on Dec 26, 2009

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