"Managing Complexity" Executive MBA Presentation (1/3)

Regent’s University - MACL
Sense-Making in a
Complex World
Wickedness at Work –
Complex System Theory
Alexander Knapp
Visiting Lecturer, International
Relations, Business and Strategy

Complex System Theory and Practice
Workshop Outline
© Alexander Knapp, 2014 - All Rights Reserved. alexander@knapp.net
1. Complexity In Context
2. Complexity In Focus
3. Complexity Toolbox
Why?
What?
How?
“We all agree that
your theory is
crazy, but is it
crazy enough?”
- Niels Bohr

Section One - Complexity in Context
Outline of Content
1.1 ‘An Uneasy Feeling…’
1.2 Complexity in Context
1.3 Wicked Problems
1.4 Roots of Revolution
1.5 Wicked Solutions
1.6 Beyond Newton
1.7 Whither Wickedness
1.8 Session Two: Focus
“How wonderful
that we have met
with a paradox.
Now we have
some hope of
making progress!”
- Niels Bohr

Complex System Theory and Practice
Introduction
“The age of
Nations is past. It
remains for us
now, if we do not
wish to perish, to
set aside the
ancient prejudice
and build the
Earth.”
- Pierre Teilhard
de Chardin
Alexander Knapp, Visiting Lecturer
 Twenty years in international politics and business
 Ten years post-conflict, complex emergencies
 Delivered £500m+ in international projects

Political and International Systems
“Today the rule of law is at risk around
the world…In too many places, hatred,
corruption, violence and exclusion go
without redress. The vulnerable lack
effective recourse and the powerful
manipulate laws to retain power and
accumulate wealth. At times even the
necessary fight against terrorism is
allowed to encroach unnecessarily on
civil liberties.”
UN Secretary General Kofi Annan
UNGA - 21 September, 2004
“It is not an
accident that our
fragmentary form
of thought is
leading to such a
widespread range
of crises – social,
political,
economic,
ecological, in the
individual and in
society as a
whole…”

Environmental and Ecological Systems
"Over the past few years, we've seen
an increasing trend toward greater
activity in the Atlantic Basin and
increased strength in storms…leading
us to believe that we are going to start
seeing more intense and frequent
hurricanes. That may be bearing itself
out right now as rising ocean
temperatures from global warming fuel
the destructive storms.”
Marshall Shepherd
Research Meteorologist, NASA
24 July, 2004
“It is not an
accident that our
fragmentary form
of thought is
leading to such a
widespread range
political,
economic,
ecological, in the
individual and in
society as a whole.
To develop new
insights into
fragmentation and
wholeness requires
creative work…”

Economic and Market Systems
“On Oct. 16, 2001, Enron was
forced to disclose $1 billion in
losses…forcing the company into
bankruptcy proceedings, wiping
out thousands of jobs and tens of
billions of dollars in savings. Enron
was the first of the recent business
scandals that have devastated
investor faith, contributed to a
multi-trillion-dollar market
downturn and made corporate
reform a political imperative.”
The Washington Post
July 28, 2002
“It is not an
accident that our
fragmentary form
of thought is
leading to such a
widespread range
political,
economic,
ecological, in the
individual and in
society as a whole.
To develop new
insights into
fragmentation and
wholeness requires
creative work…
The result: losing
one’s whole way of
thinking…and
gaining a different
approach in which
all elements fit in a
new order and in a
new structure.”
- David
Bohm

…in the
World’s belly.
The ‘enteric
nervous system’
has – the brain in
your gut – has
over 100 million
neurons, more
than the spinal
cord, or all the
nervous system
combined.
‘Gut feelings’ are
often intellectual
conclusions reached
by innate non-linear
analysis before being
‘rationally’ recognised
by the brain.

Complexity is the
result of massive
interdependence.
Complexity can
emerge in any
system: political,
economic or social.
Its effects are
heightened by linear
institutions unfit to
manage non-linear
problems, and
multiplied by resource
scarcity.
1.2 Complexity in Context
Context
Globalisation
Recession
Complexity
Definition – The setting for an event, statement, or idea, and in
terms of which it can be fully understood and assessed.
+
=
Institutions
x

Wicked Problems
on the global scale
can’t be solved by
any one sector.
Success is a result of
doing enough of the
right things at the
same time, not as
much doing things in
the right order.
1.3 Wicked Problems
Academic
Research,
analysis and
education
International
Global
regulatory
framework
INGOs
Engine of
popular
conscience
Conflict Management
Global Warming
Biodiversity/Ecosystem Loss
Deforestation
Maritime Safety and Pollution
Illegal Drugs
Education
Digital Divide
Natural Disaster Prevention/Response
Reinventing Taxation
Biotechnology
Trade and Competition
Corporate
Resources
pacing
change
Fisheries Depletion
Water Deficits
Global Financial Systems
E-Commerce
Intellectual Property Rights
International Migration/Labor
Infectious Diseases
Poverty Alleviation

Leaders engage
and manage
Wicked Problems.
Often, the best option
to do so involves
changing and building
capacity of outdated
institutions.
1.3 Wicked Problems
1. Planetary, “make-or-
break” issues
2. Urgent, disproportionate
impact of delay
3. Cost of action far less than
cost of inaction
4. Complex, global gains at
local losses
5. Insufficient capacity of
current institutions
“Some problems are so complex that you have to be highly
intelligent and well-informed just to be undecided about
them.”
- Laurence J. Peter
Insufficient
capacity of
current
institutions

Feedback (and
‘Feed-forward’)
loops multiply the
impact of
complexity and
generate
unexpected
variations and
consequences.
1.3 Wicked Problems
Deconstructing Global Warming
Ice-Caps
Melting
Average Temp
Increase of 3ºC
Terrestrial
CO2 Out-
Gassing
Species
Die-Off
Rise in Sea
Level
Drop in
Food
Output
Increase in
Migration
Deforestation
Increase in
Disease
Changing
North
Atlantic
Current
European
Ice-Age
Fisheries
Depletion
Rise in
Poverty
Deconstructing Global Warming

Complex systems
have ‘a life of their
own’.
This effect ‘emerges’
naturally, and ‘adapts’
over time.
1.3 Wicked Problems
Wicked Problems = Complex Systems
A Complex System cannot be
described without describing each
part but each part must be described
in relation to other parts.
These systems contain continuously
changing relationships that aren’t
easily measured or simply altered in
a predictable way.

Wicked Problems
themselves are
interdependent,
emergent, and
adaptive.
1.3 Wicked Problems
Wicked Problems = Complex Systems
Wickedness in the World

par·a·digm shift
(noun) - a
fundamental
change in
approach or
underlying
assumptions
Each time an age of
civilisation ends, it’s
replaced by a new set
of assumptions about
how the world really
works. Change of
institutions to adapt
isn’t guaranteed;
survival is not
mandatory.
Rock of Ages
Age of Cycles - Survive, scavenge,
plow, sow, cultivate, protect, harvest,
store, survive. Repeat.
Age of Progress - Most efficient route
between A and B…faster, cheaper,
better…deconstruct to construct
First… Then… Next… Finally…

Newton’s legacy
was to give
Western
civilisation control
over linear
process, but the
illusion of control
over non-linear
ones.
Newton’s Legacy
The Universe as a giant clock, and
God the cosmic clockmaker, each part
has its purpose, and to understand each
piece is to understand the whole…
Executive
Directors
Management
Staff
Organizational Chart
Reporting Schedules
Deconstruction
Six-Sigma
Functional Groups

Newton’s legacy
was to give
Western
over linear
process, but the
illusion of control
over non-linear
ones.
Newton’s Legacy
The Universe as a giant clock, and
God the cosmic clockmaker, each part
has its purpose, and to understand each
piece is to understand the whole…
Executive
Directors
Management
Staff
Organizational Chart
Reporting Schedules
Deconstruction
Six-Sigma
Functional Groups
First Law
“A body continues to maintain its state of rest or
of uniform motion unless acted upon by an
external unbalanced force.”
Second Law
“F = MA: the net force on an object is equal to
the mass of the object multiplied by its
acceleration.”
Third Law
“To every action there is an equal and opposite
reaction.”

Newton’s legacy
was to give
Western
over linear
process, but the
illusion of control
over non-linear
ones.
“A Body In Motion…”
“The Board of Directors, after consultations with the
Executive (and other staff as appropriate) has
adopted the attached five-year Strategic Plan and
wishes to inform all employees…It will be reviewed
periodically as necessary.”
- Internal Memo
Fortune 500 Company
New York, NY, USA

Newton’s legacy
was to give
Western
over linear
process, but the
illusion of control
over non-linear
ones.
Force = Mass x Acceleration
“In response to increasing market volatility, we
are pleased to announce the merger of Delta with
Northwest Air, a bold move that will consolidate
our positions and lead the industry…”
- E-mail Announcement
Merger Approved
29 October, 2008

Newton’s legacy
was to give
Western
over linear
process, but the
illusion of control
over non-linear
ones.
Action – Reaction
“…[W]ith the goal of creating an integrated set of
business processes where the possibility of error
or inadvertent change is limited by design to no
more than six degrees of standard deviation from
the norm.”
- Training Manual
“Six-Sigma”
Introduction

par·a·digm shift
Rock of Ages
Age of Cycles - Survive, scavenge,
plow, sow, cultivate, protect, harvest,
store, survive. Repeat.
Age of Progress - Most efficient route
between A and B…faster, cheaper,
better…deconstruct to construct
First… Then… Next… Finally…
Age of Revolution - Change is no
longer additive, it doesn’t move in a
straight line, multivariate acceleration
and random mutation
(noun) - a
fundamental
change in
approach or
underlying
assumptions
Each time an age of
civilisation ends, it’s
replaced by a new set
of assumptions about
how the world really
works. Change of
institutions to adapt
isn’t guaranteed;
survival is not
mandatory.
?
When?

Global human
population growth
is around 81
million annually, or
1.2% per year.
The global
population has
grown from 1 billion
in 1800 to 7 billion in
2012. It is expected
to keep growing to
reach 11 billion by
2100.
Population – Resource Strains
8 Billion2020
6 Billion2000
5 Billion1990
3 Billion1960
Population (Est.)Year Global Warming, Biodiversity/
Ecosystem Loss, Fisheries Depletion,
Deforestation, Water Deficits,
Maritime Safety and Pollution, Poverty
Alleviation, Conflict Management,
Education, Infectious Diseases

Moore’s Law is a
computing term
which originated
around 1970; the
simplified version
of this law states
that processor
speeds, or overall
processing power
for computers will
double every two
years.
Put another way, the
capability of
technology to change
and adapt increases
by 50% ever single
year.
Technological Folding
Version 7.0 7.1 8.07.5
Digital Divide, Natural Disaster Prevention/Response, Reinventing
Taxation, Bio- and Nanotechnology, Global Financial Systems,
Illegal Drugs, Trade and Competition, Intellectual
Property Rights, E-Commerce, International
Migration/Labor

Leaders engage
and manage
Wicked Problems.
Often, the best option
to do so involves
changing and building
capacity of out-dated
institutions.
1. Planetary, “make-or-
break” issues
2. Urgent, disproportionate
impact of delay
3. Cost of action far less than
cost of inaction
4. Complex, global gains at
local losses
5. Insufficient capacity of
current institutions
“Some problems are so complex that you have to be highly
intelligent and well-informed just to be undecided about
them.”
- Laurence J. Peter
“The dogmas of the quiet past are inadequate to the stormy
present. The occasion is piled high with difficulty, and we must
rise with the occasion. As our case is new, so we must think
anew and act anew.”
- Abraham Lincoln
“Problems that are created by our current level of thinking
can’t be solved by that same level of thinking.”
- Albert Einstein
“When one tugs at a single thing in nature, he finds it attached
to the rest of the world.”
- John Muir

The first step in
problem-solving
should be the
identification of
the type of
problem: linear, or
non-linear.
Building a Better Model
Linear Problem-Solving – ‘Somewhere out there is the perfect
answer; we just have to have enough data and processing
power to find it.’
Nonlinear Problem-Solving – ‘The problem has too many
moving parts to understand fully; we’re going to have to
choose between and test imperfect options.’
Time
Problem
Solution
Gather
Analyze
Formulate
Implement
GAFI and the Earthquake

Newton’s legacy
was to give
Western
over linear
process, but the
illusion of control
over non-linear
ones.
“The purpose of models is
not to fit the data, but to
sharpen the questions.”
- Samuel Karlin

“How I want a
drink - alcoholic of
course - after the
heavy lectures
involving quantum
mechanics!”
- Isaac Azimov
1) Accepts that there isn’t one ‘perfect’ solution;
So, We’re Looking for a Model that:
2) Recognises massive interdependence within the system;
3) Controls for small changes having large and (often)
unpredictable effects;
4) Understands that not all elements of the problem may
be accessible to influence at any given time;
5) Includes flexibility so that solutions can adapt to the
problem changing over time; and
6) Can incorporate a variety of divergent input from a
range of stakeholders key to its implementation.
Quantum
Mechanics

“Observations not
only disturb what
is to be measured,
they produce it.”
- Pascual Jordan
1.6 Beyond Newton
Beyond Newton
Quantum physics is a relatively new‘lens’ though which to view the
world, both at a small- and at a large-scale…
There is no place from which to observe
reality without influencing it somehow;
The presence of an observer
within a complex system
changes it fundamentally, as
much as any of the other
‘direct’ participants, creating
constant new evolution.
Complex Systems are
characterized by their
interconnection and
interdependence.

“Observations not
only disturb what
is to be measured,
they produce it.”
- Pascual Jordan
1.6 Beyond Newton
Quantum Physics: The Dual-Slit Experiment
There is no place from which to observe
reality without influencing it somehow;

“Observations not
only disturb what
is to be measured,
they produce it.”
- Pascual Jordan
1.6 Beyond Newton
Beyond Newton: In Practice
“As things began to settle
down, we got word at
headquarters about a small
town on the border between
two ethnic groups’ territories.
Violence was nearly non-
existent, and trade was
vigorous between the
otherwise warring factions. So
we went to see. Immediately
after our arrival, conflict flared and we had to pull back.
The next day - reports of trade. We visit, and violence.
We couldn’t understand what we weren’t seeing.”

“I’m disinclined to
believe in spooky
action at a
distance, but alas,
the proofs
reinforce the
supposition.”
- Albert Einstein
1.6 Beyond Newton
Beyond Newton
Transition of matter or energy can take place
from one location to another without
following a Newtonian law of motion;
Cause and effect are not (or
not obviously) tied together
within the system - actions in
one area can cause
unexpected results in another,
or multiple other areas, and
often redouble their impact.
Success is no longer
doing things in the right
order, but rather doing
enough of the right
things at the same time.

believe in spooky
action at a
distance, but alas,
the proofs
reinforce the
supposition.”
- Albert Einstein
1.6 Beyond Newton
Quantum Physics: Entanglement
Transition of matter or energy can take place
from one location to another without
following a Newtonian law of motion;

believe in spooky
action at a
distance, but alas,
the proofs
reinforce the
supposition.”
- Albert Einstein
1.6 Beyond Newton
“We introduced a new strain
of rice more adaptable to
wider temperature and
moisture variations, hoping to
stabilise and improve the
region’s food production
through increasing drought.
However, it was actually too
effective, and its shallow but
pervasive root systems
crowded out other deeper-rooted plants nearby,
resulting in unchecked flooding and soil/crop loss
that actually ended up lowering productivity by 42%.

believe in spooky
action at a
distance, but alas,
the proofs
reinforce the
supposition.”
- Albert Einstein
1.6 Beyond Newton
Simple Minds, Wicked Problems
Tic - Tac -
Toe
Success is no longer
doing things in the right
order, but rather doing
enough of the right
things at the same time.

believe in spooky
action at a
distance, but alas,
the proofs
reinforce the
supposition.”
- Albert Einstein
1.6 Beyond Newton
Simple Minds, Wicked Problems
Tic - Tac -
Toe

“It is a wonderful
feeling to
recognise the
unity of a complex
of phenomena that
to direct
observation
appear to be quite
separate things.”
- Albert Einstein
1.6 Beyond Newton
Beyond Newton
Inherent in the vastness and apparent chaos
of the universe is a natural and tantalizingly
simple order.
The apparent chaos of a
complex systems is governed
by surprisingly few orderly
rules, the potential energy of
which can be evoked with
comparatively minimal effort.
Change in Complex
Systems is evoked by
constructively
manipulating points of
entry and leverage.

feeling to
recognise the
unity of a complex
of phenomena that
to direct
observation
appear to be quite
separate things.”
- Albert Einstein
1.6 Beyond Newton
Quantum Physics: Self-Organisation
Inherent in the vastness and apparent chaos
of the universe is a natural and tantalizingly
simple order.

feeling to
recognise the
unity of a complex
of phenomena that
to direct
observation
appear to be quite
separate things.”
- Albert Einstein
1.6 Beyond Newton
“It reminded me of the acid
rain problem; mining and
heavy industry in England
poured chemicals into the air,
which ended up raining down
in Scandinavia, killing off
entire forests and whole
tracts of ocean fisheries. In
global warming, the same
thing is happening from the
developed world (spewing CO2) causing havoc in
Africa and Asia. But it works in reverse, too - remove
a tonne of carbon where it’s cheap to do so (India)
and the whole planet benefits.”

“A great
technological
dilemma threatens
our planet today;
ascent has taken
place without any
corresponding
elevation of
ideas…”
1.7 Whither Wickedness?
Complexity: The Tree
Roots
Sunlight
Carbon
Dioxide
Squirrels
Worms
Rain
Fire
Insects

Complexity: The Business
In the Age of
Revolution,
business is
defined by who
relates to whom.
In the Age of
Progress,
business was
defined by who
was in charge
of whom.
“A great
technological
dilemma threatens
our planet today;
ascent has taken
place without any
corresponding
elevation of
ideas…
Whatever mankind’s
success in
intermediate
organization, it has
failed to make an
organization of the
whole. The finest
energies have gone
into interim
projects…”

“A great
technological
dilemma threatens
our planet today;
ascent has taken
place without any
corresponding
elevation of
ideas…
Whatever mankind’s
success in
intermediate
organization, it has
failed to make an
organization of the
whole. The finest
energies have gone
into interim
projects…
We have made a
world without a
philosophy for
ennobling it, a plan
for conserving it, or
an organization for
sustaining it.”
- Norman Cousins
Complexity: The Planet
International
Development Democracy
Development
 Decentralization
Anti-
Corruption



“You think
because you
understand ‘one’
you must also
understand ‘two’,
because one and
one equals two.
But you must also
understand ‘and’
and ‘equals’.”
- Rumi
Paradigm Shift
1 + 1 = 2
Newtonian ThinkingQuantum Thinking
“One” “One” “Two”“And”“Equals”
1 + 1 = 2

“You think
because you
understand ‘one’
you must also
understand ‘two’,
because one and
one equals two.
But you must also
understand ‘and’
and ‘equals’.”
- Rumi
1.8 Session Two: Focus
From “Why?” to “What?”
The world isn’t getting
more complex…instead,
our understanding of its
complexity is getting
more complete.
That understanding
comes from realisation
of a complex system’s
elements, but also the
interdependence
between them.

Wicked Reading
Complex System
Theory and
Development
Practice
Samir Rihani
Amazon - 256pp
High Noon: 20 Global
Problems, 20 Years to
Solve Them
Jean-Francois Rischard
Amazon - 256pp
Politics is About
Relationship
Hal Saunders
Amazon - 256pp
Complexity: The
Emerging Science
at the Edge of
Order and Chaos
M. Mitchell Waldrop
Amazon - 384pp

Session One - Complexity in Context
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