Bear Jams, Crowd Disasters & Complexity
July 22, 2012 § Leave a Comment
Traffic Jams & Crowd Disasters
They’re called bear jams, a common occurrence in Yellowstone National Park or along the two-lane highway between Banff and Jasper in the Canadian Rockies. Drivers pull to the side of the road or simply stop in the middle to watch a brown bear forage on the hillside. Traffic backs up for miles. Sometimes a tree is mistaken for a bear with the same result. The locals call them tree jams.
I’ve often wondered—more often fumed—over what causes the equivalent of a tree jam on the freeway. Traffic slows or behaves like a freight train in a shunting yard for no apparent reason. They even have a name for it, phantom traffic jam. In an interview on Edge.org called A New Kind of Socio-Inspired Technology Dirk Helbing provides an answer…or at least a reference.
Dirk Helbing sounds like a character in a Clive Cussler novel. In fact he’s the Chair of Sociology at ETH Zurich, the Swiss Federal Institute of Technology. A physicist and a sociologist, he’s studied phantom traffic jams and crowd disasters—the cascading, catastrophic behavior that sometimes happens in large crowds and leaves people dead. No one intends harm but people still die. Helbing links both to the behavior of complex systems.
Strongly Networked Systems
Highly connected systems tend to be complex. The more interconnected, the more unstable they become. Rapid, cascading changes are characteristic of complex systems. They can change dramatically with little warning and no predictability. Our current financial system is complex. That alone should give you cause for concern.
Business is no longer a simple linear system, the sum of all it’s parts. It’s evolved into the potential interactions of all of its parts. The number of networked players in almost any business vertical—suppliers, vendors, manufacturers, publishers and end users—makes almost every company part of a complex system that is ultimately unpredictable and subject to radical fluctuation with little warning. And yet we continue with business as usual, disregarding the fact that we aren’t in Kansas anymore. We continue doing more of the same and when the results are disappointing, we do it harder.
Understanding the systems we’ve created requires the combined perspectives of social science and complexity science. It’s a completely new approach to doing business that requires embracing experimentation rather than control, innovation rather than predictability.
The Ghost in the Machine
Helbing makes the point that our computer systems are creating social systems. That sounds suspiciously like Sky Net but he cites our current financial trading as an example. Trading is done by our most powerful computers. Those computers are interlinked across banks and financial institutions globally. They are creating a particular view of the environment—the financial environment. They’re making assumptions based upon projections into the future. They’re making autonomous decisions based upon their world view.
Social Capital
Helbing talks about social capital—values like trust, solidarity, reciprocity and such—that are rarely quantified or accounted in our business strategy but have a profound impact upon our business results. The recent financial crisis has gutted trust in our economy and cost hundreds of billions in lost opportunity, eroding the wealth of the middle class, and paralyzing any recovery. The loss of social capital is not inconsequential.
Social capital is no less important than intellectual property or return on assets but it has been typically undervalued in corporate risk assessment. I suspect the continued success of Google and Apple are at least partially the result of their substantial social capital. Conversely, Microsoft’s weakness in the stock market despite strong financials likely reflects a paucity of social capital. Learning how to measure social capital and adjust a company’s direction as a result will be a substantial but rewarding challenge for business in the age of complexity.
Cynefin, a Sailor’s Perspective
November 20, 2011 § Leave a Comment
The environment of a sailor far from shore is simple if sometimes deadly. The rules are well known and the risks understood. As long as there is sufficient sea room to run before the strength of a storm, a well found boat with a capable crew can usually survive, until they can’t. (There are storms at sea that no boat can survive and waves than can kill any ship.)
When a boat closes with the coast, things get complicated. As the sea bottom rises to meet the continental shelf, waves become steeper, herded closer together, more likely to break, sending tons of white water glissading. (A breaking wave can exert as much as one ton of pressure per square foot.) Currents can set a boat towards an unforgiving shore, poor visibility can hinder navigation, and the increased traffic increases the risk of collision. Precise positioning becomes more important—accurate charts, aids to navigations, GPS and radar help inform the situation but require expert interpretation. (The Coast Guard once used a phrase that captures the risk, radar-assisted collision.) Discrepancies between one source and another further complicate decision-making.
The once uncharted coasts of our world are littered with the bones of such self-confidence.
Imagine if you were approaching an unknown coast without accurate charts or electronic positioning, navigating by sun or stars when visible, with only hearsay about the offshore hazards or longshore currents or depth of water. The uncertainty increases exponentially. From the sailor’s perspective, the reality of the coast emerges with experience. The situation is more than just complicated, it’s complex.
There is another scenario, however. Chaos. If a storm is driving you toward a lee shore with no possibility of refuge, it doesn’t matter whether you know the soundings nearshore or your exact position. The only thing that matters is clawing your way to weather. The only thing that matters is to avoid being shattered on unyielding rocks or pounded into splintered wreckage. The only thing that matters is gaining sea room. That’s my definition of chaos.
These four domains—simple, complicated, complex and chaotic—are captured in the Cynefin framework developed by David Snowden, former Director of the IBM Institute for Knowledge Management and now Chief Scientific Officer at Cognitive Edge. It’s a model to help understand the context of a situation or problem, the characteristics of that context, and the approach appropriate to that context.
Using the tools and methodology appropriate to a simple context in a complex domain is rather like sailing up to an unknown shore with naive self-confidence that intuition and past experience will be sufficient to survive. The once uncharted coasts of our world are littered with the bones of such self-confidence.
Disorder lies at the intersection of the four domains of the Cynefin framework. It’s the state of not knowing the appropriate context. I think it fair to say that is the place where we mostly live.
Despite its seeming familiarity, the world has become a different place, more complex. We have never been here before. We are all sailing toward an unknown shore, an uncharted future.
The Coming Paradigm
October 3, 2011 § Leave a Comment
I believe we’ve entered the vortex of a paradigm shift. We’ll emerge with a new order of complexity, a new understanding of our place in the world, or not at all.
Whatever the result, it’s the end of business as usual. It’s the end of a privileged few profiting at the expense of many. It’s the end of rapacious policies to benefit stockholders, one country despoiling another or companies without loyalty to any country despoiling all.
The paradigm shift that is upon us isn’t about adoption of lofty principles and worthy goals. It’s about evolutionary necessity. Survival, pure and simple. And hope.
We’ve come to the end of the capitalist dream of wealth earned on the backs of others and hoarded by a few. That economy prompted us to go far but it will take us no further. The birth of every paradigm contains the seeds of it’s self-destruction. We’ve come to the end of the old paradigm but we don’t yet clearly see the next, the new level of complexity that will incorporate and transcend it.
The most recent surveys I’ve seen estimate that over 75% of the American workforce is disengaged from their work, more or less. Some so much more that they’re actively sabotaging their company to justify their disengagement. That, I think, is symptomatic of massive forces at play like the breaking of the northern ice at the end of winter. Our entire horizon is heaving and cracking and reshaping itself into a new terrain. No one can predict what it will look like. It’s not that we currently lack sufficient knowledge or computing power to calculate the topography of that landscape. It’s simply not predictable. Period.
We’ve exhausted the value of capitalism as practiced during the last few centuries. In a cost/benefit analysis the trend line of benefit has been steadily declining while costs have been rising. The streams have crossed with disastrous results. Despair is epidemic, disengagement the result. What’s needed is hope to replace our despair, passion to replace our disengagement, meaning to replace the soulless grind of making more for fewer. What’s needed is a new religion if you also understand religion as a passionate belief in something more meaningful than our own advantage, something more transcendent, inspiring, encompassing.
There is no ring-master, only the evolving circus, each act simultaneously influencing and influenced by all the others.
What’s needed isn’t something we can architect, manufacture, market and sell. It’s not something we can proselytize or legislate. Ironically, what’s needed most is something we least control.
Certainly, there are things we can do individually and collectively to midwife the birth of the new paradigm, to keep faith with our own conscience, but what’s coming is out of our control. It has always been out of our control. We are the participants, the performers in this three-ring circus, not the ring-master. There is no ring-master, only the evolving circus, each act simultaneously influencing and influenced by all the others. It’s an endlessly entertaining show but it’s not our show exclusively. We may not even be top billing on the next paradigm’s billboard.
I’m actually more hopeful than I have been, ever. (Raised in an evangelical family, the apocalypse was rather the point of my parent’s faith or the justification, at least.) I see a way forward that might include us despite the horrendous challenges confronting humanity, most of our own making. I don’t know the path but I’ve become a believer in Ken Wilbur’s vision that evolution is the creation of increasingly complex systems that transcend but embrace what went before. Where we find ourselves—on the edge of enormous change—is less the result of moral lapse that inevitability. We are here because we had to be here. And where we go from here isn’t in our control.
Robinson Jeffers was a dour poet but a clear-sighted man. He wrote, “At the end of an age there must be sacrifice to renew beauty.” There will be much that’s lost in the transition but hopefully, more that’s gained.
Surprise ending
June 17, 2011 § 1 Comment
I’ve been reading Albert-Lazlo Barabasi’s book Linked and was surprised by the ending. More exactly, I was surprised that it ended.
I’d been led to the book by a convoluted path and a sincere, if ambitious, desire to save the world. My assumption is that things aren’t going well for the planet or ourselves. Something obviously need be done.
Capitalism in the single most powerful engine for change we’ve ever invented, besides religion, but it’s helped get us into our current crisis—the one where social and ecological apocalypse looms. To rephrase Einstein, we can’t solve our problems by using the same institutions we used when we created them. Looking for tools to help reinvent capitalism led me to Barabasi and Linked by way of complexity theory.
Be patient for a moment for an extended aside. This is a game changer. Not everything in human experience is complex but it may be. Human involvement may ensure complexity. The really interesting thing about complex adaptive systems is they’re unpredictable. You can’t reduce the system to its component parts and predict their trajectory like billiard balls. There are too many variables continually interacting—coevolving—to permit predictability. You simply can’t get there from here.
Magic has been loosed upon the world by science. Magic is ultimately unknowable, unpredictable, uncontrollable. If we can’t predict the future, we can’t control it. This may not be the scientific explanation of complexity but I think it may be what impacts us most. We don’t own the future but we have a responsibility for participating, for showing up.
That responsibility led me to Barabasi’s book. Network theory may be a way of understanding complexity and a tool for leveraging complex systems such as capitalism. More specifically in my case, leveraging Microsoft.
Microsoft may be among the most enlightened global corporations, most involved in corporate social responsibility, and most experienced in changing the world but it needs to change its corporate DNA—the fundamental way it defines its own success—in order to contribute to the change needed in the world. That’s an ambition worth embracing.
Barabasi’s book gave me some intriguing clues if not a roadmap but the ending surprised me. Reading the electronic version of Linked on Kindle, I knew I was about half way through. In fact, 67% of the way. The Kindle provides an exact ratio of what you’ve read to what there is to read. At 67% I ran smack into the notes. Frankly I would have preferred the notes incorporated into the body of the book, especially since they comprised a third of the content, rather than exiled to the appendix. They would have made for some interesting digressions.
This is only a footnote In my quest to reinvent capitalism. It won’t appear in the appendix.
Assets
May 6, 2011 § Leave a Comment
“Our employees are our most important asset” was once a popular phrase mouthed by companies promoting themselves. It was largely an empty phrase but it did reveal one telling truth—employees were like property, valuable property perhaps but ultimately just another corporate asset. A fundamental shift is required of companies evolving to meet the increasing complexity of the marketplace. They need to treat employees as collaborators rather than assets.
Collaborators are empowered to make corporate decisions at their local level either as individuals or in teams. Collaborators are partners, not employees. Collaborators are accountable to each other.
Offering a carrot or threatening with a
stick misses the point.
A company needs to be at least as complex as the markets where it competes. That may even be a law, the law of requisite complexity. Complexity requires a different orientation to knowledge workers, a different relationship between workers and company, even between workers themselves. It requires a higher sense of responsibility, an alignment with clearly articulated company goals and cultural values, an informed and knowledgeable workforce capable of making effective choices in their sphere of action. That workforce already exists. Companies need to recognize it, nurture it, and quit trying to manage it like a production line in a New England textile factory.
Salary, bonuses and incentives are just the ante required to get into the game. Of course incentives have to be sufficient for workers to feel secure and valued. They have to be competitive but they’re not the primary motivation for knowledge workers. What drives them are intrinsic motivations—autonomy, mastery, and meaning. Offering a carrot or threatening with a stick misses the point.
Offering knowledge workers more money past what’s needed to be competitive reinforces selfish, self-centered, myopic behaviors, the opposite of what’s desired. Give them more autonomy, new tools and complex skills to master, and the opportunity to serve a cause greater than corporate greed. That’s what excites them. That’s what generates flow. The alternative is to watch them vote with their feet.
Facilitation
April 5, 2011 § Leave a Comment
Complexity
April 2, 2011 § Leave a Comment
- Image via Wikipedia
I delivered the post-mortem on my Sig Sigma project, using it as a bully pulpit for complexity theory. Somewhere between the slides on nonlinearity and co-evolution I saw my audience’s eyes glaze. They were kind and patient with my enthusiasm but I had lost them as certainly as if I were talking about population dynamics of the Himalayan yeti.
My story was too abstract, lacking concrete examples or business applications. How could they believe such exotic things as complex systems existed among them any more than they believed in yetis? Uncontrollable, self-organizing groups of people—their customers—who could radically change their behavior abruptly, unpredictably? I was describing a business persons’ version of the seventh level of hell. I could also have been describing recent political events in the Mid-East.
Fortune 500 companies have the lifespan of toadstools. New business models are proliferating like pond scum. The lunatics are in charge of the asylum.
In fairness to myself, I was following my intuition, asking questions rather than providing answers. Managers need options, a barrage of answers bracketing a problem, not more questions. My description of complexity as a domain where there are no necessarily right answers didn’t reassure them.
Frankly, I’m not sure they should feel reassured. If complexity theory is true, if systems exhibiting the characteristics of complexity do live among us—if they are us—then we need to address them, comprehend them, develop tools to work with them. I had no tools to show them other than Cognitive Edge’s use of self-signified narrative captured by web form and mapped to a fitness landscape and I probably didn’t do a fair job of that.
Acknowledging the relevance of complex systems to competition would be a seismic event for business management, an event comparable to the movement of tectonic plates. The ground would shift beneath our feet. Towering edifices of management theory would fall in smoking ruin. Assumptions about command and control would die painfully and publicly. MBA programs would be traumatized. And business consultants would need to buy the emperor a new suit of clothes. It would be a big thing.
But big things are happening all around us whether or not we accept complexity theory. Fortune 500 companies have the lifespan of toadstools. New business models are proliferating like pond scum. The lunatics are in charge of the asylum. It’s a world impossible to comprehend using our old frameworks. Yet we persist in best practices we know outmoded, irrelevant and, in some cases, detrimental. To abandon what we know would be to embrace chaos. And there lies the essential paradox.
Not all was lost in my presentation. Mike Farabelli, my Six Sigma mentor (bless his patient heart) introduced me to Geza Nemesszeghy. Both are men with enormous experience in project and risk management. Geza also has an interest in complexity theory. Perhaps they can show me the next step.
Related Articles
- Human Complexity: The Strategic Game Of ? And ? (businessinsider.com)
- Can Complexity Theory Explain Egypt’s Crisis? [Egypt] (gizmodo.com)
Resentment
March 29, 2011 § Leave a Comment
There is a rising tide of resentment in the United States over the amount of wealth generated within our country that is being sheltered from corporate taxes in countries like Ireland, the Cayman Islands, and Sweden. At the same time U.S. corporations are sitting on unprecedented cash reserves, American cities are going bankrupt, states are insolvent, education and civic services underfunded, and the collective bargaining rights of civil employees are threatened. It is a mistake to think there will be no reaction.
My interest in complexity theory has led me to an appreciation of weak signals as early detection of emergent change. I suspect we may be hearing the first of an angry chorus that could become a cacophony.
The international shell game to avoid paying corporate taxes in the U.S. is fundamentally driven by demand for short-term profits, I suspect. It seems management’s obligation to exploit loopholes in the law. Google is doing it. So is Microsoft.
There’s nothing that burns hotter than the resentment of people who feel duped by their government and institutions. It’s not an inconsequential shell game, either. The latest estimate I’ve heard was almost $100 billion a year lost to U.S. tax revenue. That’s enough to fund a lot of school and civic programs. It’s also enough to fund a white hot resentment that could cost corporations a lot more than the cash they’ve saved. Companies today live or die by their brands. The average tenure of a Fortune 500 company today is 15 years, trending toward five. Even the strongest can fall abruptly.
It’s a mistake to think the American people docile and spiritless, a mistake to think the same of the people of Tunisia, Egypt or Libya. You can extinguish a match in a pool of gasoline without incident but strike a spark in the presence of even a tea-cup of gasoline fumes and you have an explosion. It all depends upon context.
Something else I’ve learned about complexity. There’s no way to accurately predict future behavior in a complex system except in hindsight. Change can be precipitous and dramatic. A year ago who predicted Mideast dictatorships falling like stacked dominoes?
Microsoft has done more for the common good than most companies and the wealth generated by the company continues to fund the Gates Foundation. It would be heartbreaking to see the company condemned by the same resentment directed at companies that have done so much less. But there’s nothing that burns hotter than the resentment of people who feel duped and betrayed by their government and institutions.
