complexity and defence management professor trevor taylor cranfield university at the defence...
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Complexity and defence management
Professor Trevor Taylor
Cranfield University at the Defence Academy Shrivenham
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Complexity?
Simple Complicated Complex
• Complex– Multiple links among multiple
variables– Change within system components– Difficulty of full system
comprehension– Small changes may cause large
effects– Modelling system operation gives
wide variety of possible outcome
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The traditional approach to dealing with complexity
• Ignore it• Many human achievements
reflect a capacity to build and use models– Simplifications of reality– Incorporating key
features• Dörner’s stress on human
use of ‘supersignals’ to extract key elements of reality
• Underpinned by Newtonian thought that universe is at heart ordered and predictable, even mechanical
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In the face of growing complexity• Some management thought says avoid complexity,
especially regarding the product range offered – Complexity of range of product offerings can push
up cost disproportionately– Recommendations
• Find out what your customers truly value• Reduce the variety in corporate offerings• Monitor creeping complexity within the business• ‘For every new product or service your company
adds, eliminate or streamline one from your existing portfolio’ (M.Gottfredson & A.Schwedel, ‘Cut complexity – and Costs’ Harvard Management Update August 2008)
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But growing management literature
• Building on complexity science– The universe (and business) is non-linear– Small changes can matter (do not always average out)– Unlikely events occur
• Fooled by Randomness• ‘Rather than living with the heightened anxiety created by low-
probability risk, people simply write off the residual risk to zero’ (Marc Gersten)
– World is becoming increasingly complex• The ‘perfect storm’ of technology, demographics and global
economics – Tapscott & Williams
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Growing management literature
Some sources of modern ‘business chaos’ (Rowley & Roevens)Higher customer expectations
Rapid technological innovation and obsolescenceCross cultural misunderstandings
Rapid organisational growth and extinctions in some business unitsStringent environmental legislationTalent bleeding and skill shortages
Volatile world stock marketsNewtonian consultants
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Growing management literature
Six things among others drive increasing complexity for businessesRapidly interconnecting networks of ideas and people
Disruptive technologyExplosion of choice for consumers
Increasing intangible desires of the market: customer need for emotional fulfilment‘Increasing complexity of technology, systems and processes:
complexity begets complexity’Legislation: financial transparency, safety, the environment, human rights etc
Peter Sheahan
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Growing management literature
• Building on complexity science– The universe (and business) is non-linear– Small changes can matter (do not always average out)– Unlikely events occur
• Fooled by Randomness• ‘Rather than living with the heightened anxiety created by low-
probability risk, people simply write off the residual risk to zero’ (Marc Gersten)
– World is becoming increasingly complex• This needs to be recognised and new behaviours adopted
– Formal processes– Clear rules– Bureaucratic approach
• Especially if there is a need for rapid/continuous innovation
Cannot cope withmuch contemporary
complexity
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Summary of management-related complexity theory in six minutes?
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Disturbing news for defence?
• The new art and science of wikkinomics is based upon four powerful new ideas
– Being open and transparency
– Peering
• ‘Though it is unlikely that hierarchies will disappear in the foreseeable future, a new form of horizontal organisation is emerging that rivals the hierarchical firm in its capacity to create information-based products and services, and in some cases, physical things’
– Sharing
– Acting globally
• Tapscott & Williams
Export controls
Ineffectivecollaboration
Prime contractors
The nationalDIB
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Disturbing news for defence?
• Rupert Murdoch as ‘flipstar’– July 2005 News Corp bought MySpace for $580 million– ‘The precise business model for sustained profitability from our
digital investments is still uncertain at this point. Consequently, in some ways, we are embarking on a period of trial and error’
• News Corporation Annual Report 2006– Vastly profitable exploitation of the acquisition within 18 months
• Peter Sheahan, Flip: how to succeed by turning everything you know on its head, p.35
Business cases
MainGate
Initial Gate
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Disturbing news for defence?
• ‘Most large corporations are still too much like monarchies and too little like democracies’
• ‘To reduce the costs of change in your organisation, you must embrace the principles of devolution and activism’
• ‘These management principles – variety, competition, allocation flexibility, devolution and activism – stand in marked contrast to those we’ve inherited from the Industrial Revolution. That doesn’t make the old principles wrong, but they are inadequate if the goal is continuous, pre-emptive strategic renewal’– Gary Hamel, HBR, February 2006
• Complexity guidance includes– Act before you know precisely what you are doing– Accept that there will be failures: progress by evolution– Short term flexible plans– Entrust to self-organisation of motivated people
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Complexity behaviour illustrations• 1968 US credit card industry – proliferation of cards
• Need for an effective brand while still allowing banks to compete for customers
• A design team led by a Dee Hock concluded that a system needed to be guided by some (radical) principles
– Power and function in the system must be distributed to maximum extent possible
– System should be self-organising
– Governance must be distributed
– System to seamlessly blend collaboration and competition
– System should be malleable yet durable
• ‘These principles owed more to Hock’s fascination with Jeffersonian democracy and biological systems than to any management textbook’
Gary HamelHBR
February 2006
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Complexity behaviour illustrations• 1968 US credit card industry – proliferation of cards• Need for an effective brand while still allowing banks to
compete for customers• A design team led by a Dee Hock concluded that a system
needed to be guided by some (radical) principles– Power and function in the system must be distributed to
maximum extent possible– System should be self-organising– Governance must be distributed– System to seamlessly blend collaboration and competition– System should be malleable yet durable
• ‘These principles owed more to Hock’s fascination with Jeffersonian democracy and biological systems than to any management textbook’
• Result Visa – ‘an organisation whose product was coordination’
Gary HamelHBR
February 2006
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Defence management qualifies as complex:a single machine
Air
Land
Sea
Space
Cyber
Today Future
Training
Infrastructure
Doctrine
Organisation
Information
Logistics
Equipment
Personnel
Project
Inform
Command
Operate
Sustain
Prepare
Protect
Moral
Conceptual
Defence Policy
Foreign Policy
Security Policy
Physical
Execute operations
Generate capability
Effects-based, comprehensive
approach
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Defence management qualifies as complexa single machine
Air
Land
Sea
Space
Cyber
Today Future
Training
Infrastructure
Doctrine
Organisation
Information
Logistics
Equipment
Personnel
Project
Inform
Command
Operate
Sustain
Prepare
Protect
Moral
Conceptual
Defence Policy
Foreign Policy
Security Policy
Physical
Execute operations
Generate capability
Effects-based, comprehensive
approach
Growingimportance
of information
90% of globalR&D as ‘civil’
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MoD recognition of complexity management?The Departmental Framework
• The extent, variety and complexity of the individual tasks which are required to produce modern military capability makes detailed central control or management both exceptionally difficult and very inefficient. Responsibility for individual components of capability and for supporting and administrative tasks is therefore delegated ….
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MoD recognition of complexity management?The Departmental Framework
• The extent, variety and complexity of the individual tasks which are required to produce modern military capability makes detailed central control or management both exceptionally difficult and very inefficient. Responsibility for individual components of capability and for supporting and administrative tasks is therefore delegated ….
• The need for central strategic direction both for military operations and for the peacetime creation and maintenance of military capability requires a hierarchy or vertical command and management structure
MoD enthusiasm for Wikkinomics concept of Ideagoras?(people are seduced into working for you for nothing!)
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MoD recognition of complexity management thought
• Grand Challenge for robotic surveillance– 23 teams entered– Seven reached final– Team Stellar winning
• ‘The MoD will now consider which parts of the technology it can put on show, but all the winners got was a trophy and the satisfaction of knowing they did their bit for Queen and country’
• The Independent 20 August 2008
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Conclusion
• Many questions about– The validity of complexity management thinking?
• Writing marked by anecdotes and illustrations• Not statistical evidence
– The coherence of complexity management thinking– Its relevance for the public sector?– Its relevance for defence?
• Does defence need the rapid innovation of much of the private sector?