Management & Complexity Frequently Asked Questions

Complexity in Action
Frequently Asked Questions

What do we really mean when we talk about “complexity” or a “complex system”?

Organizations, like economies, the human body, and ecologies are complex systems. They are made up of individual agents that dynamically interact with each other. These agents’ rules of behavior and networks of interactions change in response to shifts in the environment around them. These adaptations produce macro-level patterns known as emergent behavior. Macro patterns such as profitability, culture, and reputation are the emergent result of the actions and interactions of tens of thousands of connected agents.  (Adapted from Beinhocker’s The Origin of Wealth).

What’s the difference between complex systems and complicated systems?

The most elaborate mechanical watches and sophisticated Boeing airplanes are complicated. In complicated systems, each part has to perform a very specific function. One defect may bring the entire system to a halt. Redundancy must be built into these systems when failure is not an option. We understand how complicated systems work by understanding how each part works.  

In complex systems, decomposing the system and analyzing its subparts may not give us a clue to the behavior of the whole. That is because complex systems have many elements interacting and exchanging multiple inputs in a dynamic and non-linear way, constantly adapting to changes in the environment and to awareness of new information from agents around them. These agents, in their adaptive interaction, frequently organize and re-organizethemselves to respond to the environment and meet their goals. While guided by relatively “simple rules,” their individual behaviors give rise to emergent structures and patterns of interaction we frequently think of, in organizations in particular, as culture and networks. Unlike complicated systems that can be understood by reducing the whole to its parts, in complex systems, the whole that emerges is greater than the sum of its parts. 

Whether we realize it or not, even amidst formal organizational structures, hierarchies, policies and directives, the organization of complex systems occurs without the directive of any external authority. The understanding of complex environments, and the design and adoption of innovation within them, require understanding and working with the underlying patterns and dynamics. (Adapted from Amaral and Ottino, 2004; Ottino, 2004).

What is complexity used for in business?

By using complexity frameworks and tools, you can uncover what really matters in influencing your business systems to adapt. This includes spotting connecting points on the edge of boundaries where innovation is likely to occur, as well as the bottlenecks to information flow. With this knowledge, you have a better idea of interactions to encourage or discourage, combine or disentangle, and monitor that add or detract value in the system.

More conscious understanding and use of complexity also frees people to look for and see connections they did not previously see, for instance in who they go to for ideas from another function/discipline to apply to their own.

What are examples of business applications?

• Southwest Airlines changing the conventional rule of a hub-and-spoke network model of air transportation to fly short links to non-hub locations, thus increasing the speed and reducing the cost of service.

• E-Bay inventing and supporting a self-organizing system for buying and selling goods on-line, based on a few simple rules of behavior.

• Toyota increasing resiliency and adaptability in their supply network through building cars on fewer platforms and relying more on trusted relationships with their suppliers.

• Apple fueling the emergence of an entire industry to support the I-pod by recombining needs and strategies that emerged from the invention of Napster with their own design and technology capabilities.

• Proctor & Gamble innovating through cross-boundary collaboration to increase the speed and quality of innovation.

• Word of mouth or “Buzz” marketing by providing “sticky” products and messages to key connectors and mavens who influence large pools of consumer networks.

How conscious are people of using complexity?

Like many of the business examples cited above, successful leaders have used complexity in their companies often intuitively rather than consciously. It should be noted that you do not have to be the C-Suite setting strategy or an entrepreneur inventing a business to use complexity. Everyday business environments have plenty of complex interactions, adaptations, and emergence. This can swamp us, mystify us, or be a source of deepening our understanding and agility in the strategies we choose.

However, now that we have the conceptual and computational power to represent and understand the dynamics of complex systems more clearly, and see that there are commonalities across system types (e.g., biological, economic, physical), we can be much more strategic in learning how to leverage it. Like any other way of thinking and doing, it can become more regular, powerful and natural over time. At the very least, we can test and ground our intuitions and insights in more systematic, scientifically-based ways.

Does complexity science give us predictive tools or only descriptive ones?

Description is an important first step in prediction, in that we need to understand our situation before we can begin to sense the direction in which it is moving. However, complexity science does not stop there. Because it helps us capture non-linear interactions, dynamics, and connections in the system, it can help us see where the energy is and where it is going. This gives us a deeper sense of what lies beneath within the system. 

Traditional tools of prediction and forecasting often give us a more exact prediction than what we know deep down is truly possible. They can also be limited by reliance on linear behavior, as if nothing will change or interact between when we make the prediction and when the outcome happens. Complexity tools do not assume this linear exactness, but provide us with ranges, approximations, and storylines to consider. This offers us ways of keeping our finger on the pulse so we can adapt our strategies as the system changes.

Can we design the ideal complex system or network?

Because of this new ability to see the system, how it is adapting, and what is emerging, we can design changes in the environment that influence its behavior. For instance, if we see that two departments that are not communicating should be, rather than telling them “communicate” and expecting it to happen, we can locate people who serve as boundary spanners and give them tasks that open up the information flow. We can design a mutually beneficial meeting to share relevant information, or we can call their attention to a goal that requires them to work together from the start. Soon, the system will start to reshape and form around this new need or attractor of energy.

One of the understandings of complex systems made popular in The Tipping Point is that often it is small things that make a big difference in changing the system. Likewise, sometimes big initiatives have no effect or an unintended effect. Understanding the true complexities of the system helps us to know where small changes are needed.

Even in “hardwired” designed things like car platforms, technology tools, and electrical systems, an understanding of complexity can be used to make them more adaptable, multifunctional, and resilient over time.