Friday, December 28, 2007

The Power of Three: Part 2: Complex Mechanical/Adaptive Systems

In the Power of Three: Part I: Mental Models, I distinguished between complex systems and complicated systems. Both systems have many interacting parts, but a complex system is what remains after all irrelevant parts have been weeded out of a complicated system.

I now want to explore further the various types of complex systems. First there are two broad categories of complex systems. These are complex mechanical systems and complex adaptive systems.

Complex mechanical systems are systems whose many parts and their many interactions remain fixed or which have a very limited range of change. Most complex machines are complex mechanical systems and hence the name. But not all complex mechanical systems are machines. For example traditional command and control organizational structures that characterized armies and business until recently are complex mechanical systems. Complex mechanical systems can be understood by understanding how the individual parts work and how they interact with each other in producing a limited amount of behaviours. For example, consider an airplane. An airplane has many thousands of individual interacting parts; some of these parts are themselves made up of several hundred subparts. Nevertheless, a few interactions on some of the parts are transmitted to many other parts in a predetermined manner so as to allow a trained pilot to fly the plane. The trained pilot can rely on a dashboard, which reports the state of some critical parts, and ignore the state of all the other thousands of parts, to determine what to do next. The pilot can ignore the other thousands of parts because their behaviour is completely determined by the few critical parts whose state is displayed on the dashboard. If something goes wrong in a complex mechanical system, by which we mean that it does not behave as expected, the root cause can be determined, the defective part can be repaired or replaced and the system is ready to start functioning as expected once again.
To summarize then, if we understand the individual parts and the interactions of the individual then we can understand and therefore control the behaviour of the complex mechanical system as a whole.

Applying the principles of complex mechanical systems over and over again has created the most advance machines and most of the organizations structures that our society daily depends on.

Many business managers, and nearly all management consultants and business academics believe that organizations are complex mechanical systems. Hence their penchants for developing dashboards, scorecards (balanced or not), and root cause analysis and their ten rules for this and their sixty rules for that.

However we are reaching the limits of what we can next create with complex mechanical systems. Sure we can create a billion more variations of the millions of complex machines we have already created but that is what they will be: variations of what we already have. To create whole new ideas, products and services, not simple extrapolations of what we already have, we will have to look for a new mental model. That new mental model is derived form studying complex adaptive system. And organizations, which act as complex adaptive systems, will not need dashboards, scorecards, root cause analysis or the ten rules of this and the sixty-five rules of that to be well managed. Instead they will need the tools and rules that come from complex adaptive system. And these will usually be the Three Things, but more of this will be explored in a future posting.

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