Here is Part Two of a recent lecture I gave on complexity, strategy, and organisational development at the LSE Complexity Programme.
This segment introduces a model of adaptive change developed at the Stockholm Resilience Institute, which explain empirical change in complex ecosystems. The work has been expanded to other classes of socio-ecological systems, with preliminary mapping to social and economic systems as well.
In this segment I use the example of how forest ecosystems grow and change to demonstrate the life-cycle of similar kinds of complex systems, drawing from an example in the US automobile industry, used by David Hurst in his older book, Crisis and Renewal: Meeting the Challenge of Organisational Change.
This model is explained in more depth in a previous lecture on critical change in complex systems, which can be found in full length here.
The basic message is that all complex ecosystems go through dynamics of expansion, climax, collapse, and re-organisation. This implies that the larger and more connected an organisation or an industry is, the closer it gets to self-organised criticality and, therefore, collapse.
This has important implications for management in organisations at this critical point. The skills, attitudes and reward structures which succeed in the expansion and climax phases (i.e., stable and slow building up of resources and systematic exploitation of a slow changing environment) are precisely the ones which do not succeed in the collapse and re-organisation phases.
The skills, attitudes and rewards structures required to deal successfully with the transition through collapse and into re-organisation are fundamentally different than those which help build the organisation in stable times. Research at the University of Oxford, Said Business School by Rafael Ramirez and others suggests that this can only be managed with different dynamic capabilities, different people, and specialised teams, operating loosely and in parallel to the main corporate structure. To paraphrase the poet Audrey Lordes, “you can’t fix the master’s house with the tools of the master”.
This is a fundamental distinction for change management. It implies that smaller, better connected, and more agile teams will always be at the competitive advantage compared to larger, more established, and less flexible ones. If incumbent organisations and governments are to be successful at weathering the inevitable transitions in their industries and environments, they must be able to incorporate and utilise these teams to help them understand the cycle of change and respond appropriately.
The example I provide from the car industry suggests that in the case of GM, for example, the appropriate complexity response would have been to move as rapidly through the collapse phase as possible and into transition, possibly through the distribution of a large number of small, experimental mobility grants to lay the seeds for the next successful system. By propping up the automotive industry in its current form (and the banking industry, perhaps), you are working against the flow of time and the dynamics of complex systems and just delaying the inevitable collapse as conditions continue to change. In doing so you could lose the benefits of renewal and be washed away in the subsequent storm.
In the next and last part of this talk I show how different conditions inform different kinds of knowledge and strategies for action via a modified version of Dave Snowden’s Cynefin Framework, with specific examples from different industries and consulting engagements.