Edgeware - Principles

Since the behavior of a CAS emerges from the interaction among the agents, and since the detailed behavior of the system is fundamentally unpredictable, it does little good to spend all the time that most organizations spend in detailed planning. Most organizational leaders have participated in very detailed planning, only to find that assumptions and inputs must be changed almost immediately after the plan is finalized. Complexity science suggests that we would be better off with minimum specifications and general senses of direction, and then allow appropriate autonomy for individuals to self-organize and adapt as time goes by. The science behind this principle traces it roots back to a computer simulation called “Boids,” developed in 1987 by Craig Reynolds. The simulation consists of a collection of autonomous agents – the boids – in a environment with obstacles. In addition to the basic laws of physics, each agent follows three simple rules: (1) try to maintain a minimum distance from all other boids and objects; (2) try to match speed with neighboring boids; and, (3) try to move toward the center of mass of the boids in your neighborhood. Remarkably, when the simulation is run, the boids exhibit the very lifelike behavior of flying in flocks around the objects on the screen. They flock, a complex behavior pattern, even though there is no rule explicitly telling them to do so. While this does not prove that birds actually use these simple rules, it does show that simple rules – minimum specifications – can lead to complex behaviors. These complex behaviors emerge from the interactions among agents, rather than being imposed upon the CAS by an outside agent or an explicit, detailed description.

"The principle of min specs [minimum specifications] suggests that managers should define no more than is absolutely necessary to launch a particular initiative or activity on its way. They have to avoid the role of ‘grand designer’ in favor of one that focuses on facilitation, orchestration and boundary management, creating ‘enabling conditions’ that allow a system to find its own form."
-Morgan

In contrast, we often over-specify things when designing or planning new activities in our organizations. This follows from the paradigm of “organization as a machine.” If you are designing a machine, you had better think of everything, because the machine cannot think for itself. Of course, in some cases, organizations do act enough like machines to justify selected use of this metaphor. For example, if you are having your gall bladder removed, you’d like the surgical team to operate as a precision machine; save that emerging, creative behavior for another time! Maximum specifications and the elimination of variation might be appropriate in such situations.

Most of the time, however, organizations are not machine-like; they are complex adaptive systems. The key learning from the simulations is that in the case of a CAS, minimum specifications and purposeful variation are the way to go.

This principle would suggest, for example, that intricate strategic plans be replaced by simple documents that describe the general direction the organization is pursuing and a few basic principles for how the organization should get there. The rest is left to the flexibility, adaptability and creativity of the system as the context continually changes. This, of course, is a frightening thought for leaders classically trained in the machine and military metaphors. But the key questions are: Are these traditional metaphors working for us today? Are we able to lay out detailed plans and then just do it with a guaranteed outcome? If not, do we really think that planning harder will be any better?

The quintessential organizational example of this principle of good-enough vision and minimum specifications is the credit-card company, Visa International. Despite its $1 trillion annual sales volume and roughly half-billion clients, few people could tell you where it is headquartered or how it is governed. It’s founding chief executive officer, Dee Hock describes it as a nonstock, for-profit membership corporation in which members (typically, banks that issue the Visa cards) cooperate intensely “in a narrow band of activity essential to the success of the whole” (for example, the graphic layout of the card and common clearinghouse operations), while competing fiercely and innovatively in all else (including going after each other’s customers!). This blend of minimum specifications in the essential areas of cooperation, and complete freedom for creative energy in all else, has allowed Visa to grow 10,000 percent since 1970, despite the incredibly complex worldwide system of different currencies, customs, legal systems and the like. “It was beyond the power of reason to design an organization to deal with such complexity,” Hock explained. “The organization had to be based on biological concepts to evolve, in effect, to invent and organize itself.”

"Managers therefore cannot form a vision of some future state toward which the business can be moved; the futures open to the system are too many, and the links between a future and the actions leading to it are too obscure. Chaotic dynamics lead us to see strategy as a direction into the future that emerges from what managers do. In chaotic conditions, strategy cannot be driven by pure intentions. Instead, it represents the unintentional creation of order out of chaos."
-Stacey