Complexity & Systems ThinkingPatrick Albina & Dr Erin Evans

PMI National Conference 25th May 2015

Patrick AlbinaMobile: 0412 182 581patrickalbina@illuminateconsultants.com.auwww.illuminateconsultants.com

Dr Erin EvansMobile: 0448 848 016Dr.erin.evans@gmail.com

The State of Play TodayAccording to CEOs

In 2010 IBM conducted a study of over 1500 CEOs worldwide.

– 66 Countries– 33 Industries

What do you think was their number 1 issue?

The Number 1 issue – Complexity

The State of Play TodayAccording to CEOs

What they said…

…they expected that complexity will rise and more than half of the CEOs doubted their ability to manage it.

“We occupy a world that is connected on multiple dimensions, and at a deep level — a global system of systems.”

“It is subject to systems-level failures, which require systems-level thinking about the effectiveness of our infrastructures.”

“It is this unprecedented level of interconnection and interdependency that underpins the most important findings from the CEOs.”

The State of Play TodayAccording to CEOs

“Complexity should not be viewed as a burden to be avoided; we see it as a catalyst and an accelerator to create innovation and new ways of delivering value.”

Juan Ramon AlaixPresidentPfizer Animal Health

The State of Play TodayAccording to CEOs

The State of Play Today

• The foundations of “modern” management are over 100 years old…• They were developed for the

Industrial Age

• The focus was on physical assets and efficiency

• There was a dominant paradigm of control

• Predictable, bureaucratic and conformist mindset

Ref: Mary Uhl-Bien, BNSF Railway Endowed Professorship in Leadership at Texas Christian University (TCU)

The State of Play Today

• We have entered a new age—a Knowledge Era

• Information is readily available, and often over abundant

• Focus is on knowledge, adaptability and learning

• Need to enable intellectual & social assets, and embrace diversity

Ref: Mary Uhl-Bien, BNSF Railway Endowed Professorship in Leadership at Texas Christian University (TCU)

Our current organisational models are grounded in bureaucratic principles and are not working in the modern environment.

Activity

Picture in your mind a typical Organisational Chart…

Activity

Activity

What is Complexity?• Complex ≠ Complicated

o Jumbo jets are complicated

o Mayonnaise is complex

Organisations as Machines• Predictable

• Repeatable

• Measureable

• Standardised

• Control

• Deterministic

• Driving Change

• Steering Committee

Organisations as Complex Adaptive Systems

CharacteristicsMany parts Numerous actors in the system (stakeholders)

Rich interconnectivity Stakeholders are all linked

Multiple Purposes There is diversity of views and perspectives

Recursive Teams, projects, functions, organisations, corporations, industry, sectors

Emergent properties A natural order and way of working

Sensitive to initial conditions Changes to initial assumptions can have a large impact

Simple rules Simple interactions for the actors in the system

Complex Adaptive Systems

https://www.youtube.com/watch?v=ctMty7av0jc

https://www.youtube.com/watch?v=xYl4m0xFcCU

A New Framework for Decision Making

Simple – Known• Best practice applied• Clear cause & effect• One obvious solution• Repeating patterns

Complicated – Knowable• Good practice applied• Cause & effect discoverable• More than one right

solution• Expert diagnosis required

Complex - Retrospectively knowable• Emergent practices required• Cause & effect understood

retrospectively• No clear solution with competing

ideas• Collaborative learning and adaptation

Chaotic – Incoherent• High turbulence• No clear cause & effect• Unknowables• Many decisions to make – no time to

think

Decision-Approach Framework

sense-categorise-respond

sense-analyse-respondprobe-sense-respond

act-sense-respond

Emergent practices Good practices

Novel practices Best practices

Management by Intuition

Management by Fact

Pattern-based

Leadership

Hero Leadership

ACTIVITYThe underpinning principles of complexity…

ACTIVITYThe underpinning principles of complexity…

SELF MANAGING TEAMS• Clear individual objective: Clear enough to promote purposeful action but not too specific as to restrict the

outcome to a set pattern.

• Underlying common purpose: Explicit purpose or implicit – but clear to all.

• Clear boundaries: Look at the nature of relationship across boundaries rather than the ‘who-is-in-charge-of-who’ (note that in this exercise the facilitator is technically in charge but that does not help the outcome).

• Discretion and freedom of action: No need to wait for permission but respectful of others’ rights to have the same.

• A few simple rules: Sufficient to enable action and prevent chaos.

• Skill/will of participants: Sufficient to perform the task and meet the objective (lack of either can undermine the process)

• Continuous feedback: Allowing adaptation to the reality that is present.

• A tolerance of uncertainty and ambiguity: The activity exists on the edge of chaos and is ‘far from equilibrium’.

Managing Complexity

Arnie Levin, New Yorker, December 27, 1976

SEEING COMPLEXITY MEANS BEING ABLE TO “SEE” ...

• Interrelationships rather than view changes in fragments that appear to us as linear cause-effect chains, and

• Processes of change over time, rather than

see change as snapshots.

Unintended Consequences of Policy in Complex Dynamic Systems

• Antibiotic resistant strains

• Road improvements increase traffic

• Antilock brakes promote more aggressive driving

• Low tar cigarettes cause greater carcinogen intake

• Flood control reduces incidence but increases severity

• War on drugs strategies escalate crime strategies

• Electric and hybrid cars increase travel

Systems Thinking

Systems Thinking [is] a way of thinking about, and a language

for describing and understanding, the forces and

interrelationships that shape the behavior of systems.

This discipline helps us to see how to change systems more

effectively, and to act more in tune with the natural processes

of the natural and economic world.

Peter Senge, The Fifth Discipline Fieldbook

Some benefits for ManagersSystems Thinking ...

– Helps us to join up our thinking about challenging issue

– Helps us recognise hidden and unintended consequences

– Enables us to think deeper and wider about complex

systems

– Allows us to change our behaviour

– Expands the choices available to us and focus on higher

leverage changes

A System of Systems Methodologies (SOSM)

PARTICIPANTS

UNITARY PLURALIST CONFLICTUAL/ COERCIVE

SYSTEMSSIMPLE

Simple-Unitary

Hard Systems Thinking(eg systems analysis; systems

engineering; OR)

Simple-Pluralist

Soft Systems Thinking(eg SSM, Ackoff)

Simple-Coercive

Emancipatory Systems Thinking(eg CSH)

COMPLEXComplex-Unitary

Socio-technical Systems Approaches

Organizational Cybernetics(eg VSM)

Complex-Pluralist

Soft Systems Thinking

Complex-Coercive

Summary and Questions