…while Ben is on paternity leave. Normal service to resume at the end of July…
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Over the past two years in ALNAP, we have been leading work on humanitarian innovations which resulted in a major study, an international conference and a significant investment in innovation processes by a major donor.
It is clear to us that the term innovation is being used more and more across the aid sector, whether by senior leaders like Rajiv Shah at USAID or John Holmes of UNOCHA, operational agencies working on the ground like Oxfam and the American Red Cross, or research institutes like IDS and the Humanitarian Futures Programme.
In a recent interview with Karin Wall of Innovation Management magazine, Dr. Curt Lindberg of the Plexus Institute, provided a detailed explanation of the relationship between innovation management and complexity science.
The interview transcript is below, and contains much of relevance to international aid agencies and those seeking to improve their performance.
Q: Could you define complexity science for our readers?
A: Complexity science is the most current attempt by scholars to understand how change and stability occur in systems of all kinds and the underlying dynamics that produce these patterns. The scientific community has identified a number of core principles of complex systems. Two of the most prominent are self-organization and emergence. These principles suggest that no individual agent in a system is able to control the behavior or outcomes in a system as they are a consequence of interactions within the system and with other systems. Complex systems thus by nature are unpredictable and generate surprises, which for those interested in innovation is promising news.
Q: Why would you, as a manager working with innovation, be concerned with complexity science?
A: If you more fully understand the dynamics associated with change and innovation, you can make better choices on how to foster change and innovation. You can also make better choices about who should be involved both within and outside the organization and what you can do to foster creative relationships and conversations. And you can make sure that there are diverse voices and experiences involved in your innovation processes because diversity is one of the driving forces in change and novelty in complex systems.
This young science also helps managers temper their expectations about control. Because complex systems, like organizations and groups, are self-organizing and unpredictable, no one no matter how powerful can control them. Managers with awareness of complex systems drop the burden and unrealistic expectation of control and focus on small actions they can take to influence patterns of interaction.
Q: Many people say that smaller companies are better at innovation because they are more flexible. And that bigger organizations are slower and resistant to change and that this is the reason why they are less innovative. Maybe the whole innovation game has more to do with complexity rather than size?
A: I think it might have something to do with the quality and the nature of interactions. Sometimes in smaller organizations there are more opportunities for the development of healthy, creative relationships among people.
I know there are some larger companies that try to structure themselves in ‘smaller’ ways to help ensure there are ample opportunities for people to interact.
Some larger organizations may become more rigid and rule-bound because many leaders and staff feel the need for more consistency and coherence across the firm. They fail to realize that adaptive, resilient systems are characterized by the paradoxical coexistence of order and disorder or stability and variability. People tend to divide into two camps on this spectrum. Some think that routines, predictability and order are required in organizations. Others think that experimentation, freedom and the pursuit of new ideas are what are required. They are both right.
Q: How would you approach innovation from a complexity perspective?
A: I would come at it with several questions in mind. One would be what kind of opportunities can I, as a manager, provide for a diverse group of people to interact in creative ways? What kind of processes might we employ to increase the likelihood of creative, generative interactions? In Plexus we have come to call these processes Liberating Structures. You may have heard of some of them – appreciative inquiry, positive deviance, open space, conversation café.
Next I would suggest that instead of trying to develop a grand plan or long term blue print for becoming more innovative managers should adopt a shorter-term perspective that focuses on the creation of “good enough” plans and stimulation of multiple small experiments, combined with a sense making orientation. What emerged from our plans, our actions? What did we learn? What seemed to be underneath the outcomes that were generated? What do the resulting insights suggest about the next series of steps and actions.
Q: You mean like a learning cycle?
Yes, rapid learning cycles, because if you go into a planning cycle with a very long term detailed “blueprint” orientation you are assuming it is possible to make long term projections about your organization and the economy and base detailed plans on these forecasts. Complexity suggests that, like the weather, it´s very difficult to always be right about your organizational forecasts. You may have heard the old adage, “If you want to make God laugh, tell him your plans.”
There is an ongoing discussion if innovation should be managed centrally in MNCs. What is your idea about this from an organizational perspective?
I think I would return to paradox and ask leaders to explore how innovations can be pursued from decentralized and centralized perspectives. For example, how can you build an organization-wide network to generate and spread innovations, a “centralized” undertaking, while simultaneously encouraging lots of experimentation at the local level, a “decentralized” undertaking.
Such a strategy, a broad network and abundant experimentation, builds on the observation that in complex systems large scale change comes from small changes. The scientific term for this in nonlinearity.
Q: What can you do then to make sure that you don´t miss those small actions or ideas that might result in something bigger and more important?
A: You can never be sure that you don´t miss anything, but you can have your antennae “on alert” and rely on a diverse network to listen for promising developments. Others may notice something you do not. You can provide opportunities for people to connect across the organization. The resulting conversations may uncover patterns, new innovations that were not previously apparent.
Q: Could you mention the three most important skills for leadership in making innovation happening?
A: First I would observe that leaders cannot make innovation happen. What they can do is lead and interact with colleagues in a manner that fosters innovation. How others respond and what they do will determine whether a culture of innovation is created.
Leaders can certainly provide time, space and skills to enable employees to participate and interact in creative ways around issues of importance. Too often we act like there are more important things to do than converse and make sense.
Leaders can also work on their personal skills – learning to be truly present and listen, to notice what new is emerging in conversation and how people are interacting, and to let go of the notion that as a leaders we know best.
The third skill would be the development of the ability to encourage employees to experiment, take risks and to learn from them. Accompanying such encouragement must be the genuine signal that if things do not turn out as expected “that’s OK, what can we learn”. Innovation is by definition out of the ordinary. This raises anxiety. Will it work, what will people think of me, would the leader have done it this way? Trusting that the leader will understand these feelings and stands ready to provide support and opportunities for learning may help employees to work with the anxiety associated with change and innovation.
Posted in Innovation, Knowledge and learning, Leadership, Networks, Organisations, Strategy | 1 Comment »
IBM recently released the 2010 Global CEO Survey, its 4th such study since 2004, based on over 1,500 face-to-face interviews with private sector CEOs and senior public sector leaders from 33 different industries spread over sixty countries. A concise summary, drawing on work by Irving Wladawsky-Berger, is below.
In the past three studies, CEOs consistently said that coping with change was their most pressing challenge. This time around, the primary challenge emerging out of the CEO conversations was pretty clear: complexity. “CEOs told us they operate in a world that is substantially more volatile, uncertain and complex. Many shared the view that incremental changes are no longer sufficient in a world that is operating in fundamentally different ways.”Given the realities of globalization, disruptive innovation, and profound changes across technology, markets and society, it should not be surprising that CEOs and their companies must now navigate a highly volatile and unpredictable business environment. Nearly 80% of CEOs expect the business environment to grow significantly more complex over time, but less than half believe that their organizations are equipped to deal with it successfully. This gives rise to what the report refers to as a Complexity Gap, that is, the difference between the expected complexity and the extent to which CEOs feel well prepared to manage it.Globalization is one of the major causes of this complexity gap. “CEOs told us that the current trend toward globalization would not let up. They anticipate shifting of economic power to rapidly developing markets, and foresee bigger government and heavier regulation ahead. These shifts are unyielding and contribute to the sense of a world growing more uncertain, volatile and complex.Technology is a second major factor contributing to growing complexity: “… creating a world that is massively interconnected, with broad-based convergence of systems of all kinds, both man-made systems like supply chains or cities; and natural systems like weather patterns or natural disasters. Our world is increasingly subject to failures that require systems-level and cross-systems-level thinking and approaches. The consequences of any decision can ripple with unprecedented speed across business ecosystems the way the recent economic crisis has impacted nearly every market.”Capitalizing on Complexity is the title of the 2010 study. As the name indicates, the same complexity factors that can negatively impact or even kill a company can also open up new opportunities for those companies that are prepared to capitalize on the rapidly changing business environment. This is not a new concept - almost seventy years ago, Austrian economist Joseph Schumpeter wrote about creative destruction, the process of transformation that accompanies radical, disruptive innovation, does away with companies that are not able to adjust to changing market realities and opens up new opportunities for those companies that are ready to capitalize, adjust to and thrive on those same changes.The Study identified certain Standout organizations that have been able to deliver good business results even in the recent economic downturn and feel much more prepared to deal with complexity. They come from every industry and every part of the world. One CEO, for example, said: “Really, I am not afraid of complexity at all. On the contrary, this just motivates me.”While the average complexity gap was 30 percent the Standout companies had a complexity gap of just 6 percent. At the other end, companies with poorer business results had a 52 percent complexity gap. “Compared to their industry peers, Standouts had higher increases in year-to-year operating margin. Even more striking, during the economic crisis, Standouts’ revenue growth was six times higher than the rest of the sample. So, what is this group doing to thrive?”Based on extensive analysis of the interview results, the Study concluded that Standout CEOs are capitalizing on complexity by focusing on three key areas: embodying creative leadership; reinventing customer relationships; and operational dexterity.Embodying creative leadership
“Creativity is the most important leadership quality, according to CEOs. Standouts practice and encourage experimentation and innovation throughout their organizations. Creative leaders expect to make deeper business model changes to realize their strategies. To succeed, they take more calculated risks, find new ideas, and keep innovating in how they lead and communicate.”
The more successful leaders acknowledge, are comfortable with and welcome the disruptive innovations all around them, instead of fighting these changes, as so many do. They also realize that embracing disruptive innovations implies a different, much more distributed and collaborative management style that engages with a new generation of employees, partners and customers.
“ . . . even before the financial upheaval last year, business executives operating in a fast-changing, global market were beginning to realize the value of managers who could think more nimbly across multiple frameworks, cultures and disciplines. The financial crisis underscored those concerns – at business schools and in the business world itself.”
Reinventing customer relationships
“In a massively interconnected world, CEOs prioritize customer intimacy as never before. Globalization, combined with dramatic increases in the availability of information, has exponentially expanded customers’ options. CEOs said that ongoing engagement and co-creation with customers produce differentiation. They consider the information explosion to be their greatest opportunity in developing deep customer insights.”
Building operating dexterity“CEOs are revamping their operations to stay ready to act when opportunities or challenges arise. They simplify and sometimes mask complexity that is within their control and help customers do the same. Flexible cost structures and partnering capabilities allow them to rapidly scale up or down.”
While creative leadership and customer relationships are relatively subtle concepts, operational dexterity is much more concrete. It is all about leveraging advances in technology, systems architecture and organizational capabilities to help the business become more flexible and agile so it can quickly adapt to rapidly changing market conditions…
In its concluding words, the 2010 Global CEO Study observes: “For CEOs and their organizations, avoiding complexity is not an option – the choice comes in how they respond to it. Will they allow complexity to become a stifling force that slows responsiveness, overwhelms employees and customers, or threatens profits? Or do they have the creative leadership, customer relationships and operating dexterity to turn it into a true advantage?”
I liked the report, not least because it triggered some interesting questions. I wondered what the ‘complexity gap’ would be among international aid agencies, and which if any are ‘stand out’ organisations in our sector? How much resonance do the suggestions from the business and wider public sector worlds - leadership, relationships, dexterity - have for development and humanitarian work? And finally what are the connections between this business-oriented view of complexity – arguably more akin to risk – and the insights of complexity science? Watch out for future posts following up on these issues.
Posted in Financial crisis, Institutions, Leadership, Networks, Organisations, Reports and Studies | 3 Comments »
For all those interested in or attending the Evaluation Revisited conference this week, here is a very rapid compilation of free-to-download presentations and reports plus details of meetings and websites which may be of interest.
Please do add more resources using the comments function below…
Presentations:
Mokoro Presentations on Monitoring and Evaluating complex development given in October 2009
Michael Quinn Paton: Evaluating the Complex – Given at NORAD 2008 Conference
Ben Ramalingam: Evaluation and the Science of Complexity – Given at NORAD 2008 Conference
Ricardo Wilson-Grau: Complexity and Evaluation in International Networks MDF 2006 Seminar
Reports and Studies
Evaluation and Complexity - full report of the July 2009 meeting in London
Outing the Tooth Fairy by Vicky Cosstick
David Byrne’s paper on integrated methods and their potential to further understanding of complex processes of transformation, written for UNAIDS
Evaluation evolution? Broker Article from June 2008
Pamela Mischen on public administration and complexity
Outcome Mapping Learning Community report which found “that the underlying principles of Outcome Mapping acknowledge and resonate very well with complexity theory.”
Bob Williams Evaluation and Systems Thinking Draft
Irene Guijt, Assessing and Learning for Social Change, IDS
Ian Sanderson’s paper on Evaluating Complexity given at the European Evaluation Society’s Fifth Conference in 2003
Rick Davies’ paper on Improved Representations Of Change Processes: Improved Theories Of Change presented at the Seville (2002): 5th Biennial Conference of the European Evaluation Society and the www.mande.co.uk website
Terry Smutylo’s paper ‘Crouching Impact, Hidden Attribution’ on Outcome Mapping case studies
Meetings and Conferences
Show me the Change A very well-documented event in Melbourne, Australia – a ‘National Conference on Complexity, and the Art and Science of Evaluation of Behaviour Change’
The Mokoro Seminars Two part seminar series run by Mokoro, an Oxford aid think-tank and consultancy operation, with some excellent presentations, notably from Pip Bevan
The 2009 London Dialogue the 6th in the emergent series of workshops and conferences, hosted by Panos and facilitated by Robin Vincent and Ben Ramalingam
The 2008 Norad Meeting A conference held by NORAD in Oslo, bringing together practitioners and policy makers from around the world
Websites
Rick Davies deservedly popular M&E website
The fast-growing Outcome Mapping Learning Community
The Pelican Initiative – a fantastic resource
The IDRC Evaluation Unit Website – the people who support so much of the work cited above
Posted in Evaluation, Knowledge and learning, Meetings, Reports and Studies | 1 Comment »
In the middle of the 19th century, one of the most widely publicised scientific struggles was to predict the motion of planetary bodies. Using Newtonian mechanics, it was simple enough to calculate the trajectory of one or two planets. However, when a third was added into the mix, the equations become complex and incomprehensible.
Steven Strogatz described the three body problem in a 2009 article:
It’s notoriously intractable, especially in the astronomical context where it first arose. After Newton solved the… equations for the two-body problem (thus explaining why the planets move in elliptical orbits around the sun), he turned his attention to the three-body problem for the sun, earth and moon. He couldn’t solve it, and neither could anyone else. It later turned out that the three-body problem contains the seeds of chaos, rendering its behavior unpredictable in the long run.
Newton knew nothing about chaotic dynamics, but he did tell his friend Edmund Halley that the three-body problem had “made his head ache, and kept him awake so often, that he would think of it no more.”
Newton wasn’t the only one. Two centuries on, in honour of his 60th birthday, Oscar II, King of Sweden established a prize for anyone who could find the solution to the so-called three-body problem.
The prize was eventually given to French Mathematician Henri Poincaré. Poincaré did not in fact manage to solve the three body problem. But as one of the judges put it ‘while this work cannot indeed be considered as furnishing the complete solution of the question proposed… it is nevertheless of such importance that its publication will inaugurate a new era in the history of celestial mechanics.’
Poincare found the trajectory of planets in the three body system to be one of ‘awesome complexity’ (Capra, 1996), and in describing it he inadvertently developed one of the first fractals. As he described it:
When we try to represent the figure formed by these [planets] and their infinitely many intersections, [they] form a type of trellis, tissue, or grid with infinitely fine mesh [which] bends back upon itself in a very complex manner… I shall not even try to draw it, [yet] nothing is more suitable for providing us with an idea of the complex nature of the three-body problem.
Poincare was, in the poetic words of Fritjof Capra, ’gazing at the fingerprints of chaos’. With the advent of computers over a hundred years later, scientists were at last able to represent Poincare’s figures. Here’s an early example, with each of the three colors represents the trajectory of a distinct body:
(for more on this, and exotic-sounding things such phase space and strange attractors, see the ODI working paper on complexity and aid – concept 7)
The comparison between such systems and social, economic and political issues is not a perfect one. But as Deborah Barlow has written, as a catch all for what lives outside our model of reality, the three-body problem is at least a useful metaphor.
Certainly, the turbulence that has been experienced in the past few weeks of British politics, and the way the situation is continuing to unfold, is analogous to a two body problem evolving into a three body problem.
We saw this in the debates, when the surprising popularity of the Lib Dem leader left pundits struggling to assess the outcome of the election – ‘the most unpredictable in a generation’. We saw it on election night, when the distribution of votes confounded all attempts by the exhausted TV presenters to explain what was happening. And we are seeing it now in the negotiations, with each party having to think through a range of possible future permutations and combinations, with each move potentially triggering a dizzying number of consequences. We also have to look forward to the potential complexity of the legislative and policy-making arrangements under a hung parliament with three parties.
Get it right, and it could make for the most interesting and tranformative period in British politics for decades. Get it wrong, and things could descend into turbulence and chaos.
Newton, one imagines, would be chuckling to himself in the grave.
Posted in Campaigns, Chaos, Institutions, Leadership, Public Policy | Leave a Comment »
In the 1970s, systems thinker Russell Ackoff argued that some of the greatest problems happen when messy problems are dealt with as if they were simple puzzles. The true extent of interconnectedness and interdependence of the world we live in is ignored or downplayed until a crisis – i.e. when it is already too late.
Time and time again, whether it is foot and mouth disease, terrorism, climate change, or the banking crisis, senior leaders and politicians display their inability to anticipate critical issues that are emerging. This is what I have described elsewhere as the “catastrophe-first” model of lesson learning.
The Icelandic volcano has led to a new wave of such analyses among journalists, often drawing on the ideas of complexity science. A New York Times article featured on this blog is just the latest example. In the UK’s Guardian, George Monbiot drew on complexity in his piece entitled ‘What links the banking crisis and the volcano?’, and suggested:
beyond a certain level, connectivity becomes a hazard. The longer and more complex the lines of communication and the more dependent we become on production and business elsewhere, the greater the potential for disruption. This is one of the lessons of the banking crisis. Impoverished mortgage defaulters in the United States – the butterfly’s wing over the Atlantic – almost broke the global economy. If the Eyjafjallajökull volcano – by no means a monster – keeps retching it could, in these fragile times, produce the same effect.
(a previous Aid on the Edge post highlights a speech by the Bank of England’s director of financial stability in which he uses complexity adaptive systems theory to explain the banking crisis)
But what do scientists think? John Brockman, editor of the ever-impressive Edge.org, invited scientists, philosophers, psychologists, economists, artists and theoreticians from diverse fields to contribute their thoughts to The Ash Cloud- An Edge Special Event.
Brockman’s call was specific: he wanted the community of thinkers on the Edge to think about the ash cloud and the reaction to it, and tell him in 250 words something “that I don’t already know and that I’m not going to read in the newspapers”. Perhaps unsurprisingly, quite a few of the comments focus on different aspects of complexity science. These included:
- Haim Harari, physicist, who echoes Monbiot in saying the ash crisis and the financial crisis have much in common: Most decision makers don’t understand math and science, he says, and most mathematicians and scientists “have no feel for the real implications of their calculations.” He says we need scientifically trained political decisions makers.
- Peter Schwartz, futurist and cofounder of the Global Business Network, is among those who say the consequences of the eruption are “a true Black Swan.” He also says the event may not be over. If the volcano continues to erupt, or the even bigger adjacent volcano erupts, the ash cloud could be bigger, spread further, and have even greater consequences.
- Emanuel Derman, professor of financial engineering, who said “Old technology-propeller driven planes-would not have been grounded by ash. More efficient, more vulnerable.”
- Lawrence Krauss, physicist, who argued that the ash cloud demonstrates that with major events there is no such thing as local or regional, illustrating using the potential of a nuclear conflict between India and Pakistan to disrupt global climate for a decade. He adds, “If a simple volcano in Iceland can immobilize much of the world, even a small scale nuclear conflict has the capacity to affect all of humanity so profoundly that mere airline flight cancellations would be the least of our worries.”
Others wrote about our need to understand risk, the trouble with risk aversion, the fallibility of models, and our relationship with chaos. Click here to read all of these provocative essays.
I have two personal favourites. The first by Eduardo Salcedo-Albaran has implications for complexity in aid problems:
Two ideas should be kept in mind when dealing with this epistemological and methodological entity called “nature”. First, we do not have the “real” image of nature, and maybe never will. We only have models, theories and simulations, in which “facts” are defined by a partial number of variables. Second, we need more integrative thinking: Scientists working together will recognize the complexity of nature, have a more accurate image of it, and will stop proposing naïve models. This applies to understanding volcanoes, brains, markets and stars. We cannot surrender to the complexity. When we stop trying to explain nature through science, we try it through religion or myth. Curiosity is also a force of nature, and science is the best tool available to understand the world… That’s the best we can do with uncontrollable forces of nature: from volcanic ashes to emotions.
And a shorter contribution by Roger C. Schank, psychologist and computer scientist, who says, simply: “
We are confused, as we should be.”
Posted in Financial crisis, Knowledge and learning, Leadership, Natural disasters, Public Policy, Reports and Studies | 1 Comment »
Today’s New York Times Review has a nice piece on ‘making sense of complexity’ which cites the work of Brenda Zimmerman, noted complexity specialist whose work on health systems has featured on two previous Aid on the Edge posts (here and here).
Here it is in full:
The Great Recession and the wars in Iraq and Afghanistan, arguably the toughest problems we’ve confronted in decades, are nothing if not spectacularly complicated. Trying to size up these puzzles is like gaping at a homemade contraption that has mysteriously evolved into something even its designers can no longer fathom, let alone operate and dismantle. Is there an owner’s manual for this thing? Can it be unplugged? If we figure out where it’s getting fuel, can we starve it and hope it expires?
Look at the military’s PowerPoint slide of the Afghanistan war, a labyrinth of cross-thatching lines and arrows swirling around words like INSURGENTS and COALITION CAPACITY & PRIORITIES. “When we understand this slide,” said Gen. Stanley A. McChrystal, who leads the American effort in Afghanistan, “we’ll have won the war.”
At the same time, we’re learning more about the financial instruments that caused our economic collapse, and it’s now clear that “exotic,” the adjective of choice, won’t suffice. Synthetic collateralized debt obligations are impenetrable on purpose, built for maximum opacity. They’re also lethal mysteries to companies like A.I.G., an insurance firm whose supposed expertise is assessing risk. A.I.G. needed an $85 billion government loan to remain solvent.
You sense that the march toward complexity has turned into a sprint in the debate about health care reform and even the gargantuan oil spill in the Gulf of Mexico, challenges so baroque, and with so many disparate and moving parts, the best you can do is hope that someone in charge understands them. Complexity used to signify progress — it was the frisson of a new gadget, the riddle of some advance in technology. Now complexity lurks behind the most expensive and intractable issues of our age. It’s the pet that grew fangs and started eating the furniture.
Of course, a nagging sense of incomprehension is a perennial feature of the human experience. When a character in “The Winter’s Tale” describes a spectacle that “lames report to follow it and undoes description to do it,” Shakespeare is talking about the reunion of King Leontes and a daughter presumed dead for many years. But the sentiment works just as well as a reaction to events preceding the Troubled Asset Relief Program. The difference is that Shakespeare’s speakers tend to marvel at natural mysteries, and when confronting them the playwright seems to endorse a certain humility. Today, our mysteries are self-created, and humility seems like a response we can’t afford.
“Are We Doomed?” read the headline to an article in New Scientist, a British magazine that last year took a long look at complexity. (Spoiler alert: maybe.) There is a lot of end-of-days talk when it comes to this subject. You will find a strain of it in the work of Joseph Tainter, an anthropologist at the University of Utah and the author of “The Collapse of Complex Societies.” In the book, Mr. Tainter examines three ancient civilizations, including the Roman Empire, and explains how complexity drove them to ruin, essentially by bankrupting them.
Does he look at the complexity of the problems facing the United States and see doom? Possibly.
“Complexity creeps up on you,” he said in an interview. “It grows in ways, each of which seems reasonable at the time. It seemed reasonable at the time that we went into Afghanistan. It’s the cumulative costs that makes a society insolvent. Everything the Roman emperors did was a reasonable response in the situation that they found themselves in. It was the cumulative impact that did them in.”
Mr. Tainter isn’t peddling the nostalgic charms of simplicity, which is wise because there aren’t a lot of people who would buy it. Unless the subject is TV remote controls, most Americans have a fondness for complexity, or at least for ideas and objects that are hard to understand. In part that is because we assume complicated products come from sharp, impressive minds, and in part it’s because we understand that complexity is a fancy word for progress.
Just about every profession has become more complicated in recent decades. The sheer volume of data and rules that must be grasped by a certified public accountant, for instance, has exploded, says Gary Giroux, a professor of accounting at Texas A.& M. The bible of the business is the portentously named “Original Pronouncements,” a book that at its heftiest a few years ago ran to roughly 10,000 pages.
A century ago, Mr. Giroux says, there were no accounting courses, let alone “Original Pronouncements,” because accountants were just guys who double-checked the math of corporations to ensure there wasn’t internal fraud. What happened?
“There was no income tax until 1913,” he says, “and before the New Deal, there was no Securities and Exchange Commission.”
It’s been fashionable for some time to bash accounting for its encyclopedic list of rules and standards, which is perhaps why a public relations rep at the Financial Accounting Standards Board can come across as a little defensive when asked about the size of the group’s most famous door-stopping tome. But you can’t understand where all those regs came from without realizing that they made possible, and mirrored, the growth of the economy.
Which gets to the worrisome part of the complexity of problems we face today. Instead of improving our lives, it’s vexing them.
What we need, suggests Brenda Zimmerman, a professor at Schulich School of Business in Ontario, is a distinction between the complicated and the complex. It’s complicated, she says, to send a rocket to the moon — it requires blueprints, math and a lot of carefully calibrated hardware and expertly written software. Raising a child, on the other hand, is complex. It is an enormous challenge, but math and blueprints won’t help. Performing hip replacement surgery, she says, is complicated. It takes well-trained personnel, precision and carefully calibrated equipment. Running a health care system, on the other hand, is complex. It’s filled with thousands of parts and players, all of whom must act within a fluid, unpredictable environment. To run a system that is complex, it’s not enough to get the right people and the ideal equipment. It takes a set of simple principles that guide and shape the system. For instance: Teach everyone the best practices of doctors who are really good at hip replacement surgery.
“We get seduced by the complicated in Western society,” Ms. Zimmerman says. “We’re in awe of it and we pull away from the duty to ask simple questions, which we do whenever we deal with matters that are complex.”
Those complicated financial instruments that helped bludgeon the economy, she says, should have been subjected to elemental tests: Is this good for consumers? What are the risks involved?
Of course, nobody at Goldman Sachs or any other large financial institution meant to wreck the economy. The United States military didn’t invade Iraq or Afghanistan thinking that one day its efforts would be mounted on a bewildering PowerPoint slide. The engineers who designed the BP oil platform that exploded and sank and produced one of the largest oil spills in history built it with multiple back-up systems.
But complexity has a way of defeating good intentions. As we clean up these messes, there is no point in hoping for a new age of simplicity. The best we can do is hope the solutions are just complicated enough to work.
Posted in Conflict and peace building, Financial crisis, Healthcare, Public Policy, Strategy, Technology, Urbanisation, Water | 1 Comment »
John Lennon famously quipped that life was what happened when you were busy making other plans.
A new book Dynamic Sustainabilities: Technology, Environment, Social Justice from the fantastic STEPS centre at the University of Sussex focuses on how much the same contradiction plays out in the global movements toward development, environmental sustainability and social justice.
To quote Melissa Leach, one of the book’s authors and the Director of the STEPS centre:
On the one hand, there is wide recognition of growing complexity and dynamism, but on the other hand, there appears to be an ever-more urgent search for big, technically-driven managerial solutions. When these solutions falter in the face of local dynamics and uncertainties, the response is often to implement them with greater force, or to blame locals or critics – rather than to question the underlying assumptions.
The book sets out some key approaches for more effective sustainable development that those with an interest in complex adaptive systems will instantly recognise. They include:
- The importance of dynamics: “…take dynamics seriously. This means moving beyond conventional approaches rooted in standard equilibrium thinking. Rather than attempting to control variability, it may often be more appropriate to develop strategies that respond to it, building resilience and robustness.”
- Understanding uncertainty: “…governments and institutions are increasingly preoccupied with the insecurities that threats seem to pose. However, dominant approaches involve a narrow focus on a particular (highly incomplete) notion of risk. This assumes complex challenges can be calculated and managed – excluding other situations where understanding possible future outcomes is more problematic. It is essential to have a wider appreciation of the dimensions of uncertainty if we are to avoid the dangers of creating deceptive, control-based approaches to complex and dynamic realities.”
- Different viewpoints: “…wider assumptions about the goals of development or sustainability… often assume that there is only one view of the problem and possible solutions. Yet different people and groups understand – or ‘frame’ – environment and development issues in very different ways; they have varying knowledge and experience, and value different goals and outcomes. Paying serious attention to multiple framings brings vital opportunities to advance debates about sustainability and connect them more firmly with social justice.”
The book focuses on a number of ‘wicked’ problems, including water scarcity in India, seeds and drought in Africa, epidemics and energy. It employs the memorable metaphor of “motorways” through which powerful actors and institutions channel fast-moving policies and interventions, which “often [run] over valuable footpaths that respond better to poorer people’s own goals, knowledge and values, and to more dynamic contexts.” (For more on this metaphor, see a previous Aid on the Edge post comparing development management to traffic management.)
What to do in the face of such issues? Leach is clear, if challenging:
a key task for the present and the future is… opening up to practices that involve flexibility, diversity, adaptation, learning and reflexivity. It means recognising the alternative framings around which more effective, justice-oriented pathways may emerge. And it means new forms of political engagement to promote such pathways amidst deeply entrenched power and interests…
All of this chimes with another Lennon line: dealing with reality leaves a lot to the imagination.
Click here to find out more about the book.
Posted in Climate change, Institutions, Knowledge and learning, Leadership, Public Policy, Reports and Studies, Resilience, Strategy | Leave a Comment »
An article in yesterday’s NY Times launches a scathing attack on the use of Powerpoint in the US military, and draws some interesting conclusions about how such tools can inhibit understanding of complexity.
Exhibit A, below, is a now-infamous slide that is intended to represent the complexity of American military strategy in Afghanistan.
As General Stanley A. McChrystal, the leader of American and NATO forces in Afghanistan, said when shown the slide: ““When we understand that slide, we’ll have won the war”.
The slide has done the rounds on the Internet, provoking derision and criticism of yet another military tool that has been over-used. Bill Easterly made a point of sharing the above diagram on Aidwatchers last year, and highlighting its risible conotations. But the post drew comment from another blogger who suggested that ”if we believe that these really are complex systems, then modelling them is surely one way to get a grip, and a map is simply an intentional way to simplify the world in order to discern important connections.”
It would seem that some in the military would agree. One General who had banned Powerpoint being used in his ranks has argued that the worst crime of these tools is not graphics like the one above, but in fact the opposite problem – that Power Point’s worst offences are “rigid lists of bullet points (in, say, a presentation on a conflict’s causes) that take no account of interconnected political, economic and ethnic forces”. As the General goes on to argue:
It’s dangerous because it can create the illusion of understanding and the illusion of control. Some problems in the world are not bullet-izable… If you divorce war from all of that, it becomes a targeting exercise”
Commanders say that behind all the PowerPoint jokes are serious concerns that the program stifles discussion, critical thinking and thoughtful decision-making. Or as to quote John Kay on decision making, as Owen Barder did recently:
It is hard to overstate the damage recently done by leaders who thought they knew more about the world than they did – the managers and financiers who destroyed great businesses in the pursuit of shareholder value; the architects and planners who believed that cities could be drawn on a blank sheet of paper; and the politicians who believed they could improve public services by the imposition of targets. They failed to acknowledge of the complexity of the systems for which they were responsible and the multiple needs of the individuals who operated them… Politicians imagined they could reconstruct the Middle East on the basis of an American model of lightly regulated capitalism and liberal democracy, although they had not the slightest knowledge or understanding of the societies they sought to remodel. The banking executives supposed they were in control of large institutions, when in reality the floors beneath them were occupied by a rabble of self-interested individuals determined to evade any controls on their activities. Financiers believed that models they did not understand enabled them to manage risks they did not understand, attaching to securities they did not understand. That is how the UK and US entered this decade with foreign policy in tatters, a financial system close to meltdown and a fiscal policy in disarray. Successful decision-making is more limited in aspiration, more modest in its beliefs about its knowledge of the world, more responsive to the reactions of others, more sensitive to the complexity of the systems with which it engages. Complex goals are generally best achieved obliquely.
As an aside, senior military officials have said, off the record, that the Powerpoint ‘does come in handy when the goal is not imparting information, as in briefings for reporters [which] often last 25 minutes, with 5 minutes left at the end for questions from anyone still awake. Those types of PowerPoint presentations… are known as “hypnotizing chickens.”’
(due thanks to Alexander Knapp)
Posted in Knowledge and learning, Public Policy, Reports and Studies, Strategy, Technology | 2 Comments »
A recent piece of work has led to the coining of the phrase ‘aid net-oric’ (pron: net-er-ik) – a form of rhetoric which applies to exaggerated and bombastic use of the term ‘network’ in the aid sector.
Once you start looking, you can see potential examples of ‘aid net-oric’ everywhere, from political manifestos to organisational mission statements and job descriptions. As Enrique Mendizabal and Julius Court argued back in 2005, networks are more than the latest buzzword - they may not be able to transform power relations or resource issues, but they can help perform certain functions which are challening for traditional hierarchies.
But there are serious gaps in how networks are understood. As a forthcoming ODI report will argue, many aid agencies evoke the term ‘network’ without really understanding what it means, and how it differs from other ways of organising. More often than not, the term is a fashionable way of describing pretty standard projects or programmes.
Despite this lack of clarity, the term has seen growing use in the higher echelons of the aid world. Kofi Annan made numerous calls for the UN system to become dynamic networks akin to global businesses. More recently in a speech on modernizing multilateralism the World Bank president Bob Zoellick made the following statement:
Modern multilateralism will not be a constricted club with more left outside the room than seated within. It will look more like the global sprawl of the Internet, interconnecting more and more countries, companies, individuals, and NGOs through a flexible network. Legitimate and effective multilateral institutions, backed by resources and capable of delivering results, can form an interconnecting tissue, reaching across the skeletal architecture of this dynamic, multipolar system. Woodrow Wilson wished for a League of Nations. We need a League of Networks.”
This evocation of biology and networks is a remarkable one given the long history of dealing with multilateral institutions as ‘international machinery’ for achieving global goals. Work I did with Paul Clarke on organistional change in the aid sector suggested that ‘one of the most prevalent metaphors for aid organisations is the machine… it leads to technical recommendations, ‘levers’ for change, and re-engineering organisations for maximum efficiency’ (Clarke and Ramalingam, 2008).
As a result, aid organisations are now widely expected to act as rational entities, be equal to the sum of their parts, and use information in a logical and systematic fashion. Although this may have worked for Ford in the 1920s, most organisations do not today face or match these conditions, and very few aid agencies are among them. But the mindsets and incentives associated with machine bureacracies have proved resilient. Developments in knowledge networks and communities of practice notwithstanding, the core of modern aid agencies remains bureaucratic, hierarchical and mechanistic.
The shift from seeing aid agencies as machines cogs meshed together to participants in the dynamic global networks Zoellick describes is, on the surface of it, a significant one. But moving to a networked model of multilateral organisations will not be easy. It calls for shifts in the ways that aid agencies are structured, managed, overseen, made accountable, etc etc etc. It will require shifts in the organsiations that support and finance multilaterals.
Many of these changes will be consistent with implications of the complexity sciences, and there are some thinkers such as Rick Davies who have been grappling with these issues for some time. There is good work on and by networks in the sector, often under the wire, away from the mainstream and informal.
The question is whether there is the political will, the skills and the resources to bring network-focused changes about at the high level that Zoellick calls for? Is there a shared understanding of what networks are, and their implications for the aid system? Or is this just the latest in a long line of “aid net-oric”?
The jury is out.
Posted in Facilitation, Institutions, Knowledge and learning, Networks, Public Policy | Leave a Comment »
