Complexity Thinking

© Jurgen Appelo  version 2  management30.com Complexity Thinking or Systems Thinking ++ ? “The search for simple –if not simpleminded– solutions to complex problems is a consequence of the inability to deal effectively with complexity.” – Russell L. Ackoff

Jurgen Appelo writer, speaker, trainer, entrepreneur... www.jurgenappelo.com

story

What happens when you go to a bar full of systems thinkers and complexity researchers

Russell L. Ackoff Ralph Stacey Dave Snowden Donella H. Meadows W. Edwards Deming Peter M. Senge Peter F. Drucker Peter Checkland Gerald M. Weinberg John H. Holland Michael C. Jackson John Seddon Max Boisot

“What exactly is the bar?”

“Are the people here part of the bar?”

“Is the beer part of the bar?”

“If we drink the beer, is it still part of the bar?”

“What if my beer and I go outside?”

“Is the bar a system?”

“What is the purpose of the bar?”

Reductionism Holism Complexity Theory Models Complexity Thinking Example Final words

We converse about abstractions Abstractions are imperfect and incomplete.

It is a form of interaction The activity of abstracting is basically a form of interaction between people in which they simplify the complexity of their own ordinary, everyday interactions […] in an effort to make meaning of what they are doing […]. – Ralph Stacey Complexity and Organizational Reality

To make sense of the world Sense-making is the way that humans choose between multiple possible explanations of sensory input. – Dave Snowden http://kwork.org/Stars/Snowden/snowden3.html#Simplicity

reductionism re·duc·tion·ism noun ri-ˈdək-shə-ˌni-zəm – explanation of complex life-science processes and phenomena in terms of the laws of physics and chemistry – a procedure or theory that reduces complex data and phenomena to simple terms http://www.merriam-webster.com/dictionary/reductionism

The bar is... the building, inventory, employees, guests, some interaction, etc... reductionism

A problem is that people have become addicted to the successes of reductionism. http://en.wikipedia.org/wiki/Reductionism

“Left-brain” thinking All system theories were created by engineers and scientists (“left-brainers”).

Analysis in management This systems movement […] has come to form the foundation of today’s dominant management discourse, so importing the engineer’s notion of control into understanding human activity. – Ralph Stacey Complexity and Organizational Reality

Problem: Dehumanization Cold numbers in spreadsheets

Problem: Objectivation “Designing” human interaction

Problem: Alienation Instructions from ivory towers

Problem: Prediction “Controlling” the future

Problem: Attribution Blaming people for problems

• Problem: Dehumanization • Problem: Objectivization • Problem: Alienation • Problem: Prediction • Problem: Attribution This list of five problems is my abstraction, and my attempt at sense-making!

Revenge for “right-brainers” Some people have suggested more holistic approaches.

See the whole system Living systems have integrity. Their character depends on the whole. The same is true for organizations. – Peter M. Senge The Fifth Discipline

Greater than the sum of the parts The enterprise must be a genuine whole: greater than the sum of its parts, with its output larger than the sum of all inputs. – Peter F. Drucker Management

Synthesis, not analysis Analysis is only one way of thinking; synthesis is another. [...] In analysis, something that we want to understand is first taken apart. In synthesis, that which we want to understand is first identified as part of one or more larger systems. – Russell L. Ackoff Recreating the Corporation

But what is the whole

Problem: Impossible If everything is connected to everything, what is the “whole”?

Problem: Unscientific new age fluffy bunnies – Dave Snowden http://km4meu.wordpress.com/2011/09/14/radical-ideals-and-fluffy-bunnies/

An unquestioned assumption By formulating a research aim to uncover the fundamental characteristics of systems of various kinds, we were making the unquestioned assumption that the world contained such systems. – Peter Checkland Systems Thinking, Systems Practice

Actually, there are no systems Where to draw a boundary around a system depends on the questions we want to ask. – Donella H. Meadows Thinking in Systems

There are perspectives A system is a way of looking at the world. – Gerald M. Weinberg Introduction to General Systems Thinking

Systems depend on context The boundaries of systems keep shifting, using reductionism and holism. How much to abstract or extend depends on what you want to understand.

No radical holism/reductionism Complexity theory does not embrace the radical holism of systems theory, the notion that everything matters and everything has to be taken into account. – Steve Phelan The Interaction of Complexity and Management

Brains, bacteria, immune systems, the Internet, countries, gardens, cities, beehives… They’re all complex adaptive systems.

A 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.

One perspective The properties of complex adaptive systems are: • Aggregation • Nonlinearity • Flows • Diversity – John H. Holland Hidden Order

Another perspective There are six notions in complexity theory: • Sensitivity to initial conditions (butterfly effect) • Strange attractors (unpredictability) • Self-similarity (fractals) • Self-organization (distributed control) • The edge of chaos (emergence) • Fitness landscapes (continuous improvement) – Michael C. Jackson Systems Thinking: Creative Holism for Managers

And it evolved like this... – Jeffrey Goldstein Complexity and the Nexus of Leadership

Or like this... http://en.wikipedia.org/wiki/File:Complex_systems_organizational_map.jpg

Or like this... http://www.flickr.com/photos/jurgenappelo/4948963883/

Of course, these are all just abstractions...

Complexity theory itself is complex Papers are being posted on the Web long before publication and there is rapid movement of what could be called precodified or protocodified knowledge. […] I am not saying whether this is good or bad; I am merely suggesting that this is one of the characteristics affecting the evolution of complexity sciences. – Max Boisot The Interaction of Complexity and Management

Complexity theory is about change Complexity theory is not a cohesive theory. It is not one equation. It is really a collection of ideas about the concept of change in complex adaptive systems […]. It talks about the dynamics of change in a system. – Irene Sanders The Interaction of Complexity and Management

People and relationships We found that this new science leads to a new theory of business that places people and relationships […] into dramatic relief. – Roger Lewin, Birute Regine The Interaction of Complexity and Management

And about hype I think the next century will be the century of complexity. – Stephen Hawking San Jose Mercury News, 23 January 2000

And about unification We can justifiably think of Complexity as a sort of umbrella science – or even the Science of all Sciences. – Neil Johnson Simply Complexity

But who wants unification? Scholars […] have been understandably reluctant to see their pet subject as simply one more example of some broader 'general system'! – Peter Checkland Systems Thinking, Systems Practice

No consensus, no unification Perhaps because the field has attracted researchers from a wide diversity of home disciplines, there is no consensus as to how to define, measure, describe, or interpret "complexity." – Steve Maguire The Interaction of Complexity and Management

Complexity theory explains why complex problems need multiple perspectives. It is successful in explaining its own failure at being one theory!

But complexity is growing Accelerating economic and social change in the global economy, the consequent imperative for ever faster innovation, the emergence of global networks of partners, […] the multiplication of media channels, and burgeoning diversity in both the workplace and marketplace. – Steve Denning Radical Management

And complicated is not complex Analysis works in complicated cases (plic in complicated means "fold"), but the interweavings (plex) of the complex do not yield to reductionist analysis or to a concentration on details. – Michael L. Lissack The Interaction of Complexity and Management

You can try to simplify a system to make it understandable But you cannot linearize the system to make it predictable

Complicated vs. Complex is itself is reductionism (and a false dichotomy)! Some systems can be seen as both complicated and complex.

This is all great, but how do we use all these ideas about complexity

The Scientific Method The traditional approach... 1. Observations 2. Hypotheses 3. Predictions 4. Experiments http://en.wikipedia.org/wiki/Scientific_method

Houston, we have a problem This makes the standard method of accumulating evidence highly problematic, because it is based on the assumption of repetitive events. Evidence is accumulated by observing repetitions in traditional science but rather different notions of evidence need to be developed for the complexity sciences. – Ralph Stacey Complexity and Organizational Reality

Complexity invalidates prediction! The crucial problem which science faces is its ability to cope with complexity. – Peter Checkland Systems Thinking, Systems Practice

Complexity theory predicts that we cannot rely on predictions.

That doesn’t seem very helpful. Is there anything else we can do

http://www.flickr.com/photos/hey__paul/6223650676/ What’s this?

model mod·el noun ˈmä-dəl – a usually miniature representation of something – a description or analogy used to help visualize something (as an atom) that cannot be directly observed – a system of postulates, data, and inferences presented as a mathematical description of an entity or state of affairs http://www.merriam-webster.com/dictionary/model

We use models for two reasons Confirmatory models: prediction & control Exploratory models: insight & understanding – Steve Phelan The Interaction of Complexity and Management

We’ll focus on exploratory models Confirmatory models are impossible to make in complexity theory. But we can use exploratory models to aid in sense-making.

Making sense of improvement http://en.wikipedia.org/wiki/PDCA http://gumption.typepad.com/blog/entrepreneuria/

Making sense of learning Shu Ha Ri Beginner Advanced Beginner Competent Proficient Expert http://en.wikipedia.org/wiki/Shuhari http://en.wikipedia.org/wiki/Dreyfus_model_of_skill_acquisition

Making sense of complexity Ralph Stacey Dave Snowden

There’s only 1 criterion for models Does the model help people to make sense of the world (insight and understanding)?

Of course, it requires a balance How detailed (complicated) will you make the model to make it useful? The usefulness of a model depends on the complexity of the mind and of the environment.

A simple model of London http://3.bp.blogspot.com/_FHHhq9JdAXg/TIUalCWz_zI/AAAAAAAAAUg/C0CTOtV6iiw/s1600/cowshed-spasmap-aw8-low+res.jpg

A complicated model of London http://www.bestcitymaps.com/citymaps/images/london.jpg

http://effectiveagiledev.com/AgileTraining/ScrumImplementationWorkshop/tabid/74/Default.aspx A simple model for projects

http://wyzsadvies.blogspot.com/2010/08/project-beheer-en-de-papierwinkel.html A complicated model for projects

A simple model for managers – Jurgen Appelo Management 3.0

A complicated model for managers – Dan Levinthal The Interaction of Complexity and Management

Models are never perfect All models wrong, some are useful. – George Box Usefulness is context-dependent. It depends on the people and their environment.

http://www.flickr.com/photos/miguelpdl/4356975474/ What’s this?

metaphor met·a·phor noun ˈme-tə-ˌfȯr also -fər – a figure of speech in which a word or phrase literally denoting one kind of object or idea is used in place of another to suggest a likeness or analogy between them http://www.merriam-webster.com/dictionary/metaphor

Metaphors in science • Butterfy Effect • Edge of Chaos • Survival of the Fittest Metaphors are fuzzy but effective models.

Metaphors in management organizations as machines;• organizations as organisms;• organizations as brains;• organizations as flux and transformation;• organizations as cultures;• organizations as political systems;• organizations as psychic prisons;• organizations as instruments of domination;• organizations as carnivals• . – Michael C. Jackson Systems Thinking: Creative Holism for Managers

Organizations as machines Machine images pervade management jargon. We have managers who “run” a company, much the way you would run a machine. We have the “owners” of the company, which is perfectly appropriate terminology for a machine but somewhat problematic when applied to a human community. And of course there are leaders who “drive change.” – Peter M. Senge The Fifth Discipline

Danger of metaphors Reminiscence syndrome Jumping to conclusions because things look “the same” – Jack Cowan

Example: inventory as waste The metaphor of inventory applied to knowledge work can be useful, but it fails fast. It leads people to draw conclusions about “waste” that make no sense (to me).

Useful question: when do they fail? Metaphors are the weakest of all models. They fail fast. Science likes mathematical models. They fail much later.

A key point of complexity theory Multiple weak models can make just as much sense as one strong model. (And it’s certainly better than no models.) In the end all models fail.

This point makes it clear you also need other people’s views on complexity thinking. A single perspective is not enough!

What’s this? http://www.flickr.com/photos/adactio/2634586376/

mathematics math·e·mat·ics noun ˌmath-ˈma-tiks, ˌma-thə- – the science of numbers and their operations, interrelations, combinations, generalizations, and abstractions and of space configurations and their structure, measurement, transformations, and generalizations http://www.merriam-webster.com/dictionary/mathematics

Scientific management (Taylorism) The earliest attempt at applying mathematics to management of organizations. • Improving efficiency • Reducing variation • Increasing output http://en.wikipedia.org/wiki/Scientific_management

What’s this? http://www.flickr.com/photos/inacentaurdump/2604198505/

simulation sim·u·la·tion noun ˌsim-yə-ˈlā-shən – the imitative representation of the functioning of one system or process by means of the functioning of another – examination of a problem often not subject to direct experimentation by means of a simulating device http://www.merriam-webster.com/dictionary/simulation

The heart of complexity theory At the heart of complexity theory are these formal models that utilize new techniques in artificial intelligence to motivate artificial agents. Behind them are some heavy-duty mathematics and computer science. – Steve Phelan The Interaction of Complexity and Management

Problem: prediction & control For systems dynamics thinkers, the aim is to identify leverage points for interventions that will enable them to identify where, when and how to initiate change and so stay in control. However, the ability to do this in a system that is sensitive to tiny changes is called into question. That obviously has serious implications for the human ability to stay ‘in control’. – Ralph Stacey Complexity and Organizational Reality

What’s this? http://www.flickr.com/photos/mikebaird/3464803900/

pattern pat·tern noun ˈpa-tərn – a form or model proposed for imitation – a reliable sample of traits, acts, tendencies, or other observable characteristics of a person, group, or institution – a discernible coherent system based on the intended interrelationship of component parts http://www.merriam-webster.com/dictionary/pattern

Causal Loop Diagrams Seeking patterns

Archetype: Shifting the burden Shifting the burden, dependence, and addiction arise when a solution to a systemic problem reduces (or disguises) the symptoms, but does nothing to solve the underlying problem. – Donella H. Meadows Thinking in Systems

Archetype: Shifting problems Solutions that merely shift problems from one part of a system to another often go undetected because, unlike the rug merchant, those who “solved” the first problem are different from those who inherit the new problem. – Peter M. Senge The Fifth Discipline

Archetype: The easy way out We all find comfort applying familiar solutions to problems, sticking to what we know best. – Peter M. Senge The Fifth Discipline

Problem : objectivation Consider how this systems thinking compares with the earlier framework of scientific management. The manager continues to be equated with the natural scientist, the objective observer, and just as the scientist is concerned with a natural phenomenon, so the manager is concerned with an organization. – Ralph Stacey Complexity and Organizational Reality

Problem : objectivation Hard systems thinking is unable to deal satisfactorily with multiple perceptions of reality. […] Different stakeholders will have diverse opinions about the nature of the system they are involved with and about its proper purposes. – Michael C. Jackson Systems Thinking: Creative Holism for Managers

So, how should we use those models in a social system

“Soft Systems Thinking” – Michael C. Jackson Systems Thinking: Creative Holism for Managers

“Soft Complexity” Systems theory -> Hard systems thinking Soft systems thinking Complexity theory -> Hard complexity Soft complexity – Steve Maguire The Interaction of Complexity and Management

“Social Complexity” – Dave Snowden http://emergentpublications.com/ECO/ECO_other/Issue_6_1-2_19_FM.pdf

Complexity Thinking (as I see it)

1) Address complexity with complexity The complexity of a system must be adequate to the complexity of the environment that it finds itself in. – Max Boisot The Interaction of Complexity and Management The human mind is more complex than tools Use stories, metaphors, pictures…

Law of Requisite Variety If a system is to be stable the number of states of its control mechanism must be greater than or equal to the number of states in the system being controlled. – William Ross Ashby

Law of Requisite Variety Ashby's law of requisite variety is as important to managers as Einstein's law of relativity to physicists. – Anthony Stafford Beer Designing Freedom

The Kanban board is complicated, not complex. http://www.xqa.com.ar/visualmanagement/tag/kanban/

360 Degree evaluations

Narratives useful for sense-making [Complexity thinkers] argue that complex thinking is best accomplished in a narrative mode of thinking rather than the propositional thinking of the traditional scientific method. […] Both involve recursiveness, nonlinearity, sensitive dependency on initial conditions, indeterminacy, unpredictability and emergence. – Ralph Stacey Complexity and Organizational Reality

https://picasaweb.google.com/114043888000663006020/ALENetworkWorldCafeAtXP2011Results Consider stories, metaphors, pictures or video

Reduction vs. Absorption Complexity reduction entails getting to understand the complexity and acting on it directly, including attempting environmental enactment. Complexity absorption entails creating options and risk-hedging strategies. – Max Boisot The Interaction of Complexity and Management

From reduction to absorption Top-down rules reduce an organization’s ability to deal with variety. – John Seddon Freedom from Command & Control

Insofar as the business environment is becoming more complex, firms will need to shift from the complexity-reducing strategies that secured their success from the end of the nineteenth until the end of the twentieth century and place more stress on complexity- absorbing ones-a shift away from bureaucracies and toward fiefs, markets, and clans. – Max Boisot The Interaction of Complexity and Management Reduction vs. Absorption

2) Use a diversity of models Complexity itself is anti-methodology. It is against "one size fits all." – Tom Petzinger The Interaction of Complexity and Management Multiple weak models can make just as much sense as one strong model.

Each systems approach is useful for certain purposes and in particular types of problem situation. A diversity of approaches, therefore, heralds not a crisis but increased competence in a variety of problem contexts. – Michael C. Jackson Systems Thinking: Creative Holism for Managers Multiple approaches

Different people and tools• Different metaphors and analogies• Different patterns and simulations• Different methods and practices• Multiple approaches

3) Assume dependence on context Best practice is past practice. – Dave Snowden The Interaction of Complexity and Management

Retrospective coherence Any evidence provided will depend on the period selected and the place in which the events are occurring as well as other aspects of context. It follows that any relationship anyone identifies between a management action and an outcome could have far more to do with a particular time and place where the sample is selected than anything else. – Ralph Stacey Complexity and Organizational Reality

4) Assume subjectivity and coevolution The observer influences the system, and the system influences the observer. The people form the culture, and the culture forms the people.

Feedback changes the whole system.

5) Anticipate, adapt, explore Anticipation Looking forward, proactive, imagining improvement Adaptation Looking backward, reactive, responding to change Exploration Trying things out, safe-to-fail experiments

6) Develop models in collaboration Does the model help people to make sense of the world (insight and understanding)?

1. Address complexity with complexity 2. Use a diversity of models 3. Assume dependence on context 4. Assume subjectivity and coevolution 5. Anticipate, adapt, and explore 6. Develop models in collaboration

Address1. complexity with complexity Use2. a diversity of models Assume3. dependence on context Assume4. subjectivity and coevolution Anticipate, adapt, and explore5. Develop6. models in collaboration Does Scrum Match ComplexityThinking? Yes No Yes Yes No Yes

1. Address complexity with complexity 2. Use a diversity of models 3. Assume dependence on context 4. Assume subjectivity and coevolution 5. Anticipate, adapt, and explore 6. Develop models in collaboration

Example What is the purpose of an organization?

It’s about the shareholder Our aim is to be the biggest or second biggest market player, and to return maximum value to stockholders. – Jack Welch (General Electric) http://en.wikipedia.org/wiki/Shareholder_value

It’s about the customer There is only one valid definition of business business purpose: to create a customer. – Peter F. Drucker Management

It’s about the employee When we talk to our People, we proudly draw a pyramid on the chalkboard and tell them: You are at the top of the pyramid. You are the most important person to us. You are our most important Customer in terms of priority. – Colleen Barrett (Southwest Airlines) http://leaderchat.org/2011/01/10/customers-employees-and-shareholders%E2%80%94who-comes-first-in-your-organization/

It’s about the organization The fundamental mission of an organization is to survive. – W. Warner Burke Organization Change

It’s about the environment The function of firms is to produce and distribute wealth. – Russell L. Ackoff Recreating the Organization

It’s about all of them Organizations must be viewed as social systems serving three sets of purposes: their own, those of their parts and those of the wider systems of which they are part. – Michael C. Jackson Systems Thinking: Creative Holism for Managers

It’s about none of them A system has no purpose. Purpose is a relation, not a thing to have. – Gerald M. Weinberg Introduction to General Systems Thinking

Well, it depends... Purposes are deduced from behavior, not from rhetoric or stated goals. – Donella H. Meadows Thinking in Systems

My view (with complexity thinking hat) They all have a good point. Sometimes we need a simple model. Sometimes we need a complicated model.

The Shu-Ha-Ri of purpose Shu Delight customers Ha Delight all stakeholders Ri Delight yourself

All models can be useful. Some fail faster than others. – Jurgen Appelo

There is nothing as practical as good theory. – Kurt Lewin

We should not take our models too seriously. – Gerald M. Weinberg Introduction to Systems Thinking

Is it Complexity Thinking or Systems Thinking ++

The magpie Finds what’s valuable and uses it in its nest The only bird capable of self-reflection

Address1. complexity with complexity Use2. a diversity of models Assume3. dependence on context Assume4. subjectivity and coevolution Anticipate, adapt, and explore5. Develop6. models in collaboration Copy and change7.

The peacock Showing off a complicated but totally useless idea Not capable of self-reflection

Don't take speakers too seriously. Listen (critically) to the magpies Be wary of the peacocks.

m30.me/happiness

@jurgenappelo slideshare.net/jurgenappelo noop.nl linkedin.com/in/jurgenappelo jurgen@noop.nl

http://creativecommons.org/licenses/by-nd/3.0/ This presentation was inspired by the works of many people, and I cannot possibly list them all. Though I did my very best to attribute all authors of texts and images, and to recognize any copyrights, if you think that anything in this presentation should be changed, added or removed, please contact me at jurgen@noop.nl.