Complexity

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)

Six Sigma

I’m at the bitter end of my second attempt to complete a Six Sigma project at Microsoft. Both have failed. It wasn’t a failure to follow the methodology but the ability of the methodology to keep pace with reality. That reality is a rapidly evolving marketplace driven by innovation and intense competition. I don’t think those characteristics are unique to Microsoft’s search engine advertising space or even Google and Yahoo!

The fact that the average tenure of a Fortune 500 company is now 15 years, trending toward five, is an indication of the intensity of competition and volatility in the marketplace.

---

What happens when you’re inventing the process as you go, building a bridge as you walk across the chasm, and you’re not even sure what’s important?

---

Six Sigma seems to me a discipline more suited to a factory floor than online advertising. It’s a process re-engineering methodology designed to extract every bit of value from a stable process generating predictable data. What happens when you’re inventing the process as you go, building a bridge as you walk across the chasm, and you’re not even sure what’s important?

I know there are aspects of Six Sigma for process design and there are arguments for its applicability beyond the factory floor but I suspect those environments where it succeeds are relatively simple, stable, predictable. My point is that’s not descriptive of the online advertising space and it’s probably not descriptive of a growing number of markets.

I work in a complicated if not complex space, an environment as volatile competitively as the Mid-East is politically. Almost no one predicted what would happen in Tunisia, Egypt, Libya. In hindsight we can see it coming but not in foresight. We weren’t measuring the right things in the right way at the right time. We didn’t make the connection but the connections were there if we had expanded our perceptions, if we had listened to the weak signals, if we had understood the meaning of those signals to the people generating them.

How de we respond more immediately, with greater agility, the the chorus of individual voices, the multitude of weak signals that together speak of imminent change? There is as much need in politics as in competition.

Six Sigma seems all about building for robustness but precludes flexibility. The speed at which the world is changing requires that we design instead for resilience as Dave Snowden suggests, understanding that failure is inevitable. I’m sure that criteria would have well served the designers of Japan’s nuclear power plants.