Management 3.0 - Complexity Thinking

Complexity Thinking
© Jurgen Appelo version 0.99management30.com

Once there was a software business with
unhappy customers

Customer satisfaction was low because of low
quality and productivity

Quality and productivity were low because there was
lack of skills and discipline

Customer dissatisfaction increased
pressure on teams

Stress at work meant
no time for
education

No education meant
no skills and
no discipline

Customer pressure led to
unhappy teams

Lack of skills and unhappy customers added to
decreasing
demotivation

Decreased
motivation
added to
decreasing
productivity

We call this a
Causal Loop Diagram
(Some call it a
Diagram of Effects)

It shows the business suffered from
vicious cycles

And not just one, but
many

Management saw
revenues declining

They tried to support
improvement while
cutting budgets

Meanwhile, technological pressure was increasing
And due to the crisis, economic pressure also went up

Needless to say, this business was
DOOMED

Needless to say, this business was
DOOMED
Then suddenly,
management
started learning...

A software team is a complex adaptive system (CAS), because it consists of parts (people) that form a system (team), and the system shows complex behavior while it keeps adapting to a changing environment.

It’s the same with brains, bacteria, immune systems, the Internet, countries, gardens, cities, and beehives.
They’re all complex adaptive systems.

General Systems Theory
Study of relationships between elements
Ludwig von Bertalanffy
(biologist)
1901-1972
Autopoiesis (how a system constructs itself)
Identity (how a system is identifiable)
Homeostatis (how a system remains stable)
Permeability (how a system interacts with its environment)

Cybernetics
Study of regulatory systems
Norbert Wiener
(mathematician)
1894-1964
Goals (the intention of achieving a desired state)
Acting (having an effect on the environment)
Sensing (checking the response of the environment)
Evaluating (comparing current state with system’s goal)

Chaos Theory
Study of unpredictable systems
Edward Lorenz
(meteorologist)
1917-2008
Strange attractors (chaotic behavior)
Sensitivity to initial conditions (butterfly effect)
Fractals (scale-invariance)

The Body of Knowledge of Systems
Complex systems theory is the study of complex systems using multiple system theories

Management “leading” a hierarchy of “followers” is not a very useful metaphor

Management in the System
Managers are just like the other people,
only with a few “special powers”

Management in the Environment
Or... managers are part of the team’s context,
constraining and steering the system

System boundaries are fuzzy, so you can choose...
System
Environment
or
This depends on the problem you want to solve

But you are neveran independent observer.
Either you influence the people and relationships directly, or you influence the environment and boundary, or both.
Whatever you do, your presence alone will already infuence the system.

Self-organization is the
default behavior
in complex adaptive systems

Managers want self-organization
to lead to things that have
Value

Anything that is not constrained
by management will self-organize

Complex adaptive systems are
complex
because of
Reinforcing feedback loops

Stabilizing feedback loops

Multiple causes per effect

Opposing effects per cause

Time delays between cause and effect

Complex systems are complexbecause of the many relationships, both known and unknown, that make the systems unpredictable

Known unknowns
The things you know that you don’t know
Like... who gets the next joker when playing a card game?

Unknown unknowns
The things you don’t know that you don’t know
Like... ehm?

Emergence
Some properties and behaviors of teams cannot be traced back to individual people

Unfortunately, emergent properties and behaviors are largely
unpredictable

The structureof a system can be
Complicated
very hard to understand
Simple
easy to understand

The behaviorof a system can be
Complex
somewhat
unpredictable
Ordered
fully
predictable
Chaotic
very
unpredictable

You can try to simplifya system to make it understandable
But you cannot linearizethe system to make it predictable

Machine Metaphor FallacyDon’t treat the organization as a machine

Independent Observer FallacyDon’t pretend you have an objective view

Complicated-Complex FallacyDon’t confuse complicated with complex

Linear Behavior FallacyDon’t assume things behave in a linear way

Reductionism-Holism FallacyDon’t think that sum of parts equals whole

Unknown-Unknowns FallacyDon’t think you have covered all risks

Self-Organization FallacyDon’t believe self-organization is good

Machine Metaphor FallacyDon’t treat the organization as a machine
Independent Observer FallacyDon’t pretend you have an objective view
Complicated-Complex FallacyDon’t confuse complicated with complex
Linear Behavior FallacyDon’t assume things behave in a linear way
Reductionism-Holism FallacyDon’t think that sum of parts equals whole
Unknown-Unknowns FallacyDon’t think you have covered all risks
Self-Organization FallacyDon’t believe self-organization is good

Agile managers work the system,
not the people.

Exercise: Complexity Fallacies (1/2)
Review the 14 quotes
Map each quote to one of the fallacies (2 per fallacy)
15 minutes

Exercise: Complexity Fallacies (2/2)
Think of one extra quote for each of the 7 fallacies
Write them on sticky notes numbered 1 to 7
Give the sticky notes to the next group
Let the next group guess the fallacy for each quote
25 minutes

Machine Metaphor Fallacy ___Don’t treat the organization as a machine
Independent Observer Fallacy ___Don’t pretend you have an objective view
Complicated-Complex Fallacy ___Don’t confuse complicated with complex
Linear Behavior Fallacy ___Don’t assume things behave in a linear way
Reductionism-Holism Fallacy ___Don’t think that sum of parts equals whole
Unknown-Unknowns Fallacy ___Don’t think you have covered all risks
Self-Organization Fallacy ___Don’t believe self-organization is good
1
3
2

Debrief

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Management 3.0 - Complexity Thinking

by Jurgen Appelo on Jan 11, 2011

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Management 3.0 - Complexity Thinking — Presentation Transcript