Why “problem-solving capability” NEEDS enlightened leadership

It can be difficult to understand that common management issues and disappointing business performance can be examined in the context of biological, technological and ecological systems but… they can!

If you don’t believe me, you can, pretty readily, get a copy of Stephen Covey’s famous book, “7 Habits of Highly Effective People”. I seem to recall he talks about INTERDEPENDENCE as a “higher state”. In doing so he is touching upon subjects dear to my heart and often taken for granted by each and every one of us…

…we would not fair terribly well without the unimaginable complexity of the ecosystem, that sustains our planet, or  the enormous biological complexity within the human body. There is a growing appreciation of the universality of systems: to such an extent that business, global financial, IT systems and others are now being viewed in a very different way…

Homer-Dixon’s talk centred around the relationship between energy and complexity in society. He explained that this relationship and the complexity of the modern world mean that conservation or limiting energy use will only get the world so far in dealing with energy difficulties.

“In other words, if we want to have the complex social and technological and economic systems that we have in our society today that provide us with many benefits, we need to have a lot of energy and there is a certain irreducible demand if we want to sustain that complexity,” he said.

Humanity has been dependent on cheap, abundant energy sources to reach its current population and complexity, Homer-Dixon said. However positive this complexity is for creating innovation and providing benefits for societies, the complicated nature of these systems is troublesome because understanding the workings of interconnected political, social and economic systems is nearly impossible. Predicting how the systems will react to even minor problems is very difficult as well; Homer-Dixon cited the American sub-prime mortgage crisis that led to a global financial downturn as one example.

“Complex systems are frequently tightly coupled, if you pop one part of it out you find that like a row of dominoes, you get problems cascading away,” he said.

Complexity is a product of solving problems, a cycle that the world is currently experiencing on a grand scale. “Societies become inexorably more complex as they try and solve their problems, this complexity costs energy, and over time, that complexity produces diminishing returns,” Homer-Dixon explained, illustrating that complexity can become more troublesome than helpful.

Dynamic (non-linear) systems cannot perform functions without first acquiring the enabling complexity: cast your mind back to LEARNING to walk, play tennis, read, count, use a computer, ride a bike, run a marathon or perform your current role. The fact that the will, incentive or need existed was not sufficient! Before each task could be undertaken you (your system) needed to learn new skills and how to co-ordinate (configure) inherent capabilities. To be “fit” for purpose.  Only once a system has achieved a pre-requisite level of complexity can it (solve the problems) perform the tasks required to enable system functionality.

Think of this in the context of structuring a team, department, division or developing an IT system. The component parts need to fit together to achieve the results for which the system has been assembled or constructed. With people it is possible to deliver some level of performance even when the interaction between inter-connected members is less than perfect. But get it right, working “harmoniously” (interdependently) and the collective performance can exceed all expectations…keeping things that way is another challenge hence the need for truly enlightened leadership!

Robust yet fragile: the Butterfly Effect

Relatively small “malfunctions” can disable multi-million pound manufacturing facilities, global supply chains, luxury cars, computers or mobile phones. Even having the best product guarantees nothing unless pricing, service, purchasing, marketing, distribution, etc. “fit” together to make it a winning product: think VHS and Betamax!

Even avid football fans will understand that, whilst the prospect of 11 Lionel Messi’s in your team sounds wonderful, his extensive skillset would be found wanting in defence or midfield when faced with a team, that, due to its managers skills (leadership), formation (structure) or style (strategy), are capable of performing well above their individual capabilities.

I am always suspicious of an organisation whose focus is unduly weighted toward recruiting, incentivising and deploying (often) second rate salespeople with the message to “sell more, care less” and move on. This is only one, admittedly important, function. But a strategy based around recruiting – in footballing terms – a bunch of cut price strikers, who are more messy than Messi, has obvious flaws…even if short term (tactical) results are achieved!

When is a “Black Swan” only grey?

On a more serious note, the structure of a system does degrade as it adapts to deal with changing sets of circumstance – but also in accordance with the 2nd Law of Thermodynamics!

Systems that give the impression of being stable, can and do quickly descend into “chaos” or, at least, a radically different pattern of behaviour as a result of, apparently, minor events: think about the Tunisian fruit seller and spread of unrest across the Arab world. The impact is not localised and is having a global financial impact.

Threats of “global pandemics” and the impact of natural disasters in Pakistan, Japan, Iceland and many other places across the planet illustrate both our global inter-connectedness and vulnerability. 

Thinking in Systems (and basic “systemic risk”)

Business systems that are assembled to perform increasingly complex functions but are poorly constructed or mis-aligned e.g. strategy not matched with operations or IT system, don’t just underperform for the system stakeholders (because they aren’t working interdependently) they generate risk and unnecessary complexity. Then, through their multiple inter-connections with customers and suppliers, they communicate that risk to their own marketplace (ecosystem) and connected networks – these networks can, DO, include the employees, their families and communities. But it doesn’t stop there because the effects are amplified and loop-back increasing both risk and complexity. At this point understanding some Complexity Facts would be helpful because EVERY system has a finite amount of sustainable complexity and WILL FAIL without appropriate action.

Sometimes reconfiguring or adding to the current “structure” (complexity) is the only way to make a system more robust or resilient. But that is much easier said than done! Anyone who has ever been involved in “change management” will know this!!!

Whether a qualitative assessment of a system is conducted internally or externally, objectivity can never be assured.

By analysing the data (that verifies functionality) Ontonix measure system complexity in order that the system owner/stakeholders can identify strengths and weaknesses that, otherwise, remain “hidden”. This provides a quantitative assessment of the current “state of health”, minimum and maximum sustainable complexity levels.

By measuring and mapping inter-connections and identifying “hubs” within the data,  the owner gains the ability to validate (and improve the objectivity of)  “risk decisions” – even when counter-intuitive; track or monitor the causality of individual and collective actions. For the first time they are able to manage and maintain the robustness of the system as well as being better able to manage overall performance by observing the system via a single “Complexity KPI” at macro level, or at micro level where that is the appropriate scale.

You can “give it a go” for next to nothing and it will give you a flavour of how we can help with the understanding of YOUR specific system:

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