Phase Transition Complexity strategies for change Noah Raford Massachusetts Institute of Technology London School of Econo...
Phase Transition What do you do when you are here? Noah Raford Massachusetts Institute of Technology London School of Econ...
Source:  Ludwig, 2002 Source:  Ludwig, 2002 1 ton Time Response
Source:  Ludwig, 2002 Time Response
Source:  Ludwig, 2002 1 ton
Source:  Ludwig, 2002 1 ton
“ Complex adaptive systems move towards conditions of self-organised criticality.”  (Bak, 1996)
 
“ The production of potentially catastrophic risks is endemic to late modern society.”  (Beck, 1992)
Anatomy of a Credit Collapse Housing bubble (R1 and R2) and bull market (R3) Collapsed as a result of adjustable rate mort...
 
Source:  Tainter, 1988
Key message 1 Non-linear phase transitions are endemic to all classes of complex adaptive systems
Key message 2 We live in one
Climate Change Energy Supply Security  STRESSES RESPONSES Physical Systems Social Systems Governance Erosion Behavioural N...
Increased Connectivity Increased Volatility Decreased Flexibility Formula for the 21 st  Century “  Too big. Too fast. Too...
 
Question How do you prepare for and respond to radical non-linear change?
Short answer You can’t. Increase your adaptive capacity  “ Dynamic capabilities”; mental, emotional, and social flexibility
Source:  Holling, 1987 Cycle of adaptive change Connectedness Conservation Growth Capital Weak Strong Active Passive r K
Source:  Holling, 1987 Cycle of adaptive change Connectedness Conservation Growth Release Capital Weak Strong Active Passi...
Source:  Holling, 1987 Connectedness Reorganization Conservation Growth Release Capital Weak Strong Active Passive r K Ω α...
Source:  Holling, 1987 Cycle of adaptive change Connectedness Capital Weak Strong Active Passive Reorganization Conservati...
 
 
 
Key message We don’t know when, where, or at what scale transitions will occur.  We need to be aware of when a change is b...
Key message Your strategic imperative should be driven by where you are on the adaptive cycle, and at what scale you are o...
Question How do you know which strategy to use and when to use it?
Simple Complicated Complex Chaotic Disorder Source:  Snowden, 2009 Cynefin
Simple Complicated Complex Chaotic Source:  Snowden, 2009 Cynefin Disorder r K Ω α
Simple Problems and answers well known One or a few right answers Bureaucratic practice (SOP) Constrained action Sense – C...
Simple Problems and answers well known One or a few right answers Bureaucratic practice (SOP) Constrained action Sense – C...
A-S-R P-S-R A-S-R P-S-R P-S-R Cynefin, Plus Cynefin, 4D Probe – Sense - Respond Act – Sense - Respond
Key point Scale of transition and the scale of actor determines the context for response.
Photo:  Menno van Tol
Less resources, lots of freedom Move fast Make quick decisions Uncover and create micro-opportunities Communicate and lear...
 
 
More resources, less freedom Exploit existing opportunities Slow to mobilise Slow at making decisions Less information fro...
“ Strategic renewal” efforts Thompson, Ramirez, et al. (2009) Mergers and acquisitions (macro) Small, specialised units or...
Sources:  Floyd & Lane, 2000; Teece, Pisano, Shuen, 1997 Role Conflict 70% Fail (Strebel, 1996) Act – Sense - Respond Sour...
 
Poor at A-S-R crises and P-S-R efforts Most resources, most problems Most political and bureaucratic Most insulated from t...
Policy experiments Adaptive management and monitoring Long term thinking Government as gardener “ Foresight” groups Spies ...
Key message Sensation, reflection, and communication are vital in times of transition and renewal. Rapid decision-making, ...
Implication Smaller groups exhibit greater flexibility, speed and awareness, thus have the competitive advantage over larg...
<ul><li>Identifying gaps between the world, and your perception of it </li></ul><ul><li>Close the gaps </li></ul><ul><li>A...
<ul><li>Ingredients for success </li></ul><ul><li>Mutual trust </li></ul><ul><li>Fingerspitzengefuhl (intuitive feel) </li...
“ Practice day and night until the sword becomes no-sword, the intention, no-intention.” Kendo proverb
<ul><li>Conclusion: How to win </li></ul><ul><li>Sensation </li></ul><ul><li>Reflection </li></ul><ul><li>Guidance </li></...
<ul><li>Sensation </li></ul><ul><li>Listening and talking </li></ul><ul><li>Sharing perceptions </li></ul><ul><li>Networks...
2. Reflection Constant dialogue Sense-making conversations Removing yourself from the world Facilitated workshops Creating...
2. Reflection Constant dialogue Sense-making conversations Removing yourself from the world Facilitated workshops Creating...
3. Guiding direction “ Deep source” Inspiration Shared vision Schwerpunkt / passion Discovered, not created Cannot be plan...
4. Action Bringing forth from nothing Design generation Rapid prototyping Prolific experimentation Incremental steps towar...
5. Integration Bringing back into practice Inspiring adoption Linking rewards and incentives Monitoring the results; user ...
<ul><li>Conclusion: How to win </li></ul><ul><li>People </li></ul><ul><li>Emotions </li></ul><ul><li>Conversations </li></...
Thank you [email_address] news.noahraford.com
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Complexity strategies for change

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This follow up talk from the London School of Economics Complexity Programme focuses on the scientific foundation for management strategies during times of complex transition (i.e., collapse), and what kinds of strategies work best for different kinds of organisations under different circumstances.

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  • Add circle sketch
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  • Irony of personality types here: Joshua Cooper Ramo – mashups, integrate data from multiple sources, comfortable with uncertainty, able to be out of control, able to play ADD moral responsibility quote
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  • Car example: One car defaults on loan Car dealership goes out of business Car company goes out of business Car industry goes bust Management imperative is to know where you are on here, and how to cycle through as effectively as possible. Evaluate four scales of collapse.
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  • Different kinds of knowledge for different kinds of environmental conditions
  • Different kinds of knowledge for different kinds of environmental conditions
  • Same guiding heuristics at each scale, but different implementations
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  • Photo Menno van Tol
  • Photo Menno van Tol
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  • Transcript of "Complexity strategies for change"

    1. 1. Phase Transition Complexity strategies for change Noah Raford Massachusetts Institute of Technology London School of Economics November 18, 2009
    2. 2. Phase Transition What do you do when you are here? Noah Raford Massachusetts Institute of Technology London School of Economics November 18, 2009
    3. 3. Source: Ludwig, 2002 Source: Ludwig, 2002 1 ton Time Response
    4. 4. Source: Ludwig, 2002 Time Response
    5. 5. Source: Ludwig, 2002 1 ton
    6. 6. Source: Ludwig, 2002 1 ton
    7. 7. “ Complex adaptive systems move towards conditions of self-organised criticality.” (Bak, 1996)
    8. 9. “ The production of potentially catastrophic risks is endemic to late modern society.” (Beck, 1992)
    9. 10. Anatomy of a Credit Collapse Housing bubble (R1 and R2) and bull market (R3) Collapsed as a result of adjustable rate mortgages Coming due (B4 exacerbated by R5), growing business and consumer debt, lowering purchasing power and further depressing the stock market (R3). Source: Stroh, 2009 (www.appliedsystemsthinking.com) Endogenous shocks: Percolating systemic risk
    10. 12. Source: Tainter, 1988
    11. 13. Key message 1 Non-linear phase transitions are endemic to all classes of complex adaptive systems
    12. 14. Key message 2 We live in one
    13. 15. Climate Change Energy Supply Security STRESSES RESPONSES Physical Systems Social Systems Governance Erosion Behavioural Norms Disrupting Fragile Systems Amplifying Inequality and Grievance Source: Adapted from Rosbon, 2009
    14. 16. Increased Connectivity Increased Volatility Decreased Flexibility Formula for the 21 st Century “ Too big. Too fast. Too complex.” (Robb, 2008)
    15. 18. Question How do you prepare for and respond to radical non-linear change?
    16. 19. Short answer You can’t. Increase your adaptive capacity “ Dynamic capabilities”; mental, emotional, and social flexibility
    17. 20. Source: Holling, 1987 Cycle of adaptive change Connectedness Conservation Growth Capital Weak Strong Active Passive r K
    18. 21. Source: Holling, 1987 Cycle of adaptive change Connectedness Conservation Growth Release Capital Weak Strong Active Passive r K Ω
    19. 22. Source: Holling, 1987 Connectedness Reorganization Conservation Growth Release Capital Weak Strong Active Passive r K Ω α Cycle of adaptive change
    20. 23. Source: Holling, 1987 Cycle of adaptive change Connectedness Capital Weak Strong Active Passive Reorganization Conservation Growth Release r K Ω α
    21. 27. Key message We don’t know when, where, or at what scale transitions will occur. We need to be aware of when a change is beginning, and “learn from the future, as it emerges.” ( Scharmer, 2006)
    22. 28. Key message Your strategic imperative should be driven by where you are on the adaptive cycle, and at what scale you are operating on.
    23. 29. Question How do you know which strategy to use and when to use it?
    24. 30. Simple Complicated Complex Chaotic Disorder Source: Snowden, 2009 Cynefin
    25. 31. Simple Complicated Complex Chaotic Source: Snowden, 2009 Cynefin Disorder r K Ω α
    26. 32. Simple Problems and answers well known One or a few right answers Bureaucratic practice (SOP) Constrained action Sense – Categorise - Respond Skills: 10 hrs Chaotic Unclear what are data No answers Novel practice, crisis management Creative action Act – Sense - Respond Skills: Instinctual Complicated Problems open ended A range of possible answers Analytical, investigative practice Bounded action Sense – Analyse – Respond Skills: 1,000 hrs (6 months) Complex Problems and solutions evolving No right answers Experimental practice Lightly bounded action Probe – Sense - Respond Skills: 10,000 hrs (5 years) Cynefin, Plus Source: Snowden, Raford, 2009 ? r K Ω α
    27. 33. Simple Problems and answers well known One or a few right answers Bureaucratic practice (SOP) Constrained action Sense – Categorise - Respond Skills: 10 hrs Chaotic Unclear what are data No answers Novel practice, crisis management Creative action Act – Sense - Respond Skills: Instinctual Cynefin, Plus Source: Snowden, Raford, 2009 ? Complicated Problems open ended A range of possible answers Requires analysis and investigation Bounded action Sense – Analyse – Respond Skills: 1,000 hrs (6 months) Complex Problems and solutions evolving No right answers Experimental practice Lightly bounded action Probe – Sense - Respond Skills: 10,000 hrs (5 years) r K Ω α
    28. 34. A-S-R P-S-R A-S-R P-S-R P-S-R Cynefin, Plus Cynefin, 4D Probe – Sense - Respond Act – Sense - Respond
    29. 35. Key point Scale of transition and the scale of actor determines the context for response.
    30. 36. Photo: Menno van Tol
    31. 37. Less resources, lots of freedom Move fast Make quick decisions Uncover and create micro-opportunities Communicate and learn fast Excel in A-S-R crises and in P-S-R downtime Probe – Sense - Respond Act – Sense - Respond
    32. 40. More resources, less freedom Exploit existing opportunities Slow to mobilise Slow at making decisions Less information from their environment Poor at communication Good at A-S-R crises (C&C) but poor at P-S-R Probe – Sense - Respond Act – Sense - Respond
    33. 41. “ Strategic renewal” efforts Thompson, Ramirez, et al. (2009) Mergers and acquisitions (macro) Small, specialised units or teams Special experimental projects Workshops, forums and meetings Systemic HR practices Sources: Thompson, Ramirez, et al. (2009) Probe – Sense - Respond Act – Sense - Respond
    34. 42. Sources: Floyd & Lane, 2000; Teece, Pisano, Shuen, 1997 Role Conflict 70% Fail (Strebel, 1996) Act – Sense - Respond Source: Eisenhardt and Bourgeois, 1988
    35. 44. Poor at A-S-R crises and P-S-R efforts Most resources, most problems Most political and bureaucratic Most insulated from the environment Slowest mobilization Stabilizing effect Life support systems Probe – Sense - Respond Act – Sense - Respond
    36. 45. Policy experiments Adaptive management and monitoring Long term thinking Government as gardener “ Foresight” groups Spies and intelligence agencies Funding and support for lower level innovation Creation of resource reserves Probe – Sense - Respond Act – Sense - Respond
    37. 46. Key message Sensation, reflection, and communication are vital in times of transition and renewal. Rapid decision-making, in a context of shared understanding, combined with the authority to execute, is the key to competitive advantage in transition.
    38. 47. Implication Smaller groups exhibit greater flexibility, speed and awareness, thus have the competitive advantage over large groups during times of transition (k species).
    39. 48. <ul><li>Identifying gaps between the world, and your perception of it </li></ul><ul><li>Close the gaps </li></ul><ul><li>Adjust your actions to match real conditions </li></ul><ul><li>“ Fast asymmetric transients” </li></ul>
    40. 49. <ul><li>Ingredients for success </li></ul><ul><li>Mutual trust </li></ul><ul><li>Fingerspitzengefuhl (intuitive feel) </li></ul><ul><li>Auftragstaktik (mission contract) </li></ul><ul><li>Schwerpunkt (big picture direction) </li></ul>
    41. 50. “ Practice day and night until the sword becomes no-sword, the intention, no-intention.” Kendo proverb
    42. 51. <ul><li>Conclusion: How to win </li></ul><ul><li>Sensation </li></ul><ul><li>Reflection </li></ul><ul><li>Guidance </li></ul><ul><li>Action </li></ul>Observe, observe, observe Retreat and reflect: Allow the inner knowing to emerge Act in an instant Source: Scharmer, Presencing Institute, 2009
    43. 52. <ul><li>Sensation </li></ul><ul><li>Listening and talking </li></ul><ul><li>Sharing perceptions </li></ul><ul><li>Networks and partnerships </li></ul><ul><li>Search conferences / scenario exercises </li></ul><ul><li>Early warning systems </li></ul><ul><li>Narrative tracking </li></ul><ul><li>Horizon scanning </li></ul>
    44. 53. 2. Reflection Constant dialogue Sense-making conversations Removing yourself from the world Facilitated workshops Creating a space for insight ‘ Profound truths’ to emerge “ A ‘clearing’, within which the self approaches itself from out of the darkness of misrecognition and into the ‘lighted space’ of recognition.” Heidegger
    45. 54. 2. Reflection Constant dialogue Sense-making conversations Removing yourself from the world Facilitated workshops Creating a space for insight ‘ Profound truths’ to emerge “ A ‘clearing’, within which the self approaches itself from out of the darkness of misrecognition and into the ‘lighted space’ of recognition.” Heidegger
    46. 55. 3. Guiding direction “ Deep source” Inspiration Shared vision Schwerpunkt / passion Discovered, not created Cannot be planned “ Releasing the ‘inherent tendency’ within a material... Uncovering the inherent possibilities of the material at a particular historical moment, as part of an inherent temporal unfolding that is largely unresponsive to the whims of the individual actor.” Adorno
    47. 56. 4. Action Bringing forth from nothing Design generation Rapid prototyping Prolific experimentation Incremental steps towards a holistic vision
    48. 57. 5. Integration Bringing back into practice Inspiring adoption Linking rewards and incentives Monitoring the results; user feedback
    49. 58. <ul><li>Conclusion: How to win </li></ul><ul><li>People </li></ul><ul><li>Emotions </li></ul><ul><li>Conversations </li></ul><ul><li>Mystery </li></ul>
    50. 59. Thank you [email_address] news.noahraford.com

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