Command, control and complexity

IBM’s 2010 CEO study has just been released. I discovered this on reading Irving Wladawsky-Berger’s blog (here), a reliable source of information, interest and insight. Irving Wladawsky-Berger provides a concise summary of the report which can be downloaded in a number of languages from this IBM site (here). The central message of the study is that CEO’s regard complexity as the primary issue facing them at the moment and identify three key behaviours that will enable them to ‘standout’ in a complex world: embodying creative leadership, reinventing customer relationships and building operational dexterity. The choice of words provides an easy target for those of us outside the corporate hothouse environment; however, to cavil at them would be a mistake. While the words may appear tired and uninspiring, the study provides interesting data on the thinking of many in leadership positions around the world. The study is more a survey of current attitudes and thinking than a synthesis of solutions but it is none the less useful for that. It shouldn’t take long to scan through it …, so do have a look.

What is surprising is that the proponents of complexity science have not been more vocal. Many have been labouring in this field for the past 20 years or more, so why are they not expounding on the relevance of their scholarship? A quick visit to the web sites of a few centres of complexity research reveal lots of interesting activity as you will see if you visit the sites representing groups at Oxford University (here), the Santa Fe Institute (here) and the London School of Economics (here). Perhaps it is not surprising that the focus of this work is quite academic; a follow up scan of what some consultants are doing in the ‘complexity space’ reveals a blend of the well packaged and the abstract. The well packaged stuff is very specific but is easily dismissed by those (almost inevitably the great majority) to whom it is not relevant; the more abstract treatment is generic but appears often to be so diffuse as to be hard for anyone to apply.

There appears to be a gap for which I hope a number of practitioners are heading. If so, there will soon be a wealth of interesting and stimulating material to challenge the thinking of leaders in industry, commerce and all the other areas of public and private enterprise.

Let us hope that they look into one concept from earlier days of the complexity community which goes by the description of ‘simple rules’ and is very attractive to anyone who takes comfort in an established relationship between cause and effect. Then if trying to establish a reliable relationship between cause and effect at the macro scale is doomed to failure, perhaps such a relationship can be established at the micro scale. All that then remains is to agglomerate all the predictable micro effects into a macro effect (or more likely, one of a number of possible macro effects) and the basis for making a decision re-emerges. Well, perhaps not every time but starting with simple rules that can be tested is arguably a better way of managing risk for most of us than ‘taking a punt’ on complexity at the macro level.

Sweet and sour

One thing that stands out for me in all the coverage of the Kraft takeover of Cadbury is what I see as the startling lack of ambition of the Cadbury senior leadership. Admittedly my view is UK centric, being largely informed by reports from the BBC and Financial Times. The FT is neutral in its reporting of this acquisition and yesterday’s (20th January 2010) leader is broadly supportive of the “… the UK’s openness to overseas bidders.” I am in agreement with that sentiment. On the other hand the FT’s front page headline, “Cadbury defends sell-out” is not without questioning overtones and it sits above an image of Kraft’s chief executive, Irene Rosenfeld who is smiling broadly, which suggests that Kraft are pleased with what they have achieved.

There is a section on the FT website devoted to this takeover; it includes a video interview with Roger Carr, the Cadbury chairman in which he defends the deal, and as with the headline, those words used to describe the interview are interesting in themselves. Perhaps I am reading too much into them. The interview is revealing as much for what is not said. While there is reference to achieving shareholder value, to the derisory nature of the initial offer and to the viability of an independent Cadbury, there was no indication that the senior leadership team had the stomach for continuing to lead an independent Cadbury and achieve better value for all their stakeholders than they eventually negotiated with Kraft. That is a depressing admission and calls into question whether an eventual sale was always the objective once Cadbury’s former drinks business had been split off, an option that has been the subject of press comment for some time.

In general I don’t have too many hang-ups about business ownership but I do think that something of value will be lost in this transaction. For one thing, the intangible experience of working for a company called Cadbury will soon be a thing of the past and that may matter to a significant number of people. It is an irony that many of them may well have ‘gone the extra mile’ in helping Cadbury achieve the good trading figures that sustained the company’s defence during the takeover bid. Also the confectionery world will almost inevitably become a less diverse place. No doubt the brands will remain but I will be surprised if the character of the products does not become less distinctive over time.

So why has this happened? It would seem that £8.50 per share was a more potent representation of the Cadbury leadership’s vision than a viable, global, independent confectionery business. At least in Cambridge (U.K.) we have Hotel Chocolat to fall back on for local consolation.

Thoughts on ‘The Big Shift’

Have you heard of the ‘Big Shift’? If not. You could do worse than cast your eye over these blogs (The Big Shift and Irving Wladawsky-Berger) for an introduction. The Big Shift is a phrase coined by John Seely Brown, John Hagel III and Lang Davison to describe a transformation of the business environment which they assert is working out around us right now. The transformation they describe is from the Industrial Age to the Information Age and is driven along by technological development. I don’t think I can improve on Irving Wladawsky-Berger’s summary of the thinking behind the Big Shift so do follow the link above and read his review. I also agree wholeheartedly with his concluding paragraph which I reproduce here: “ The Big Shift is a very innovative, difficult and important project. I strongly urge you to look at the full report to learn more about their objectives, methodologies and conclusions. You may not agree with all the measures chosen by the Center for the Edge team, but that is to be expected. Like any complex initiative, getting going is what counts. The Big Shift project will undoubtedly keep getting better and sharpening its results over time, especially, as it practices the spirit of learning and collaboration that it so strongly advocates. (from Irving Wladawsky-Berger’s blog)”.

Seely Brown, Hagel and Lang identify three waves of change which they call foundational, flow and impact. The foundational wave reflects the development of information technology and the almost contagious nature of its penetration into all the nooks and crannies of our society and, in one form or another, into the majority of social groupings on the planet. The second wave of change reflects their perception of the temporal nature of value, particularly in the context of knowledge; they believe there is more value in the flow of knowledge than in the stock of knowledge which changes in the foundational wave are rapidly making obsolete. The flow wave can be quantified in terms of the flow of knowledge and the movement of talent – it is interesting that the former seems to spread and the latter to concentrate. Seely Brown, Hagel and Lang’s third wave describes the impact of the two preceding waves on performance in the context of firms, markets, consumers and creative talent. One telling statistic they quote is that the average return on assets for US companies is now 25% of what it was in 1965. Another interesting observation is that value seems to be migrating from corporations to individuals, in terms of better deals for individual consumers and better compensation for individual ‘creative’ talents.

The study was performed at the Deloitte Center for the Edge of which Seely Brown and Hagel are co-chairmen and Lang Davison is the Executive Director. Their work represents a substantial advance in our ability to describe and therefore to discuss the economic environment of today. It raises a number of questions in my mind, which I hope will contribute to the dialogue:

1. The authors appear to imply a correspondence between the three waves of change as measured by the Foundational Index, the Flow Index and the Impact Index; as far as I can see, there is no fundamental reason for any correspondence. Am I missing something?
2. The authors appear to expect the rate of foundational change as measured by the Foundational Index to moderate; this may well be the case but given the demands of achieving a sustainable post industrial economy I don’t see it happening any time soon. Do they have a timescale in mind?
3. The concept of consumer disloyalty seems to reflect a corporate-centric perspective. This almost implies that customer disloyalty is bad; I would rather start from the position that customer loyalty is something to be earned.  Is this project corporate centric in its approach or is it more generic?
4. The authors describe a transition from scalable efficiency to scalable learning. I am concerned that learning is not enough; it has to lead to action and for want of a better word, I can only come up with the idea of scalable adaptation. Does this make any sense to you or to the authors?

The authors have pitched a significant contribution into what was a void – I had begun to wonder why John Hagel’s blog was less active than it had been. Now I know  and what they have written is well worth the wait. Stimulating stuff – so many thanks for the brain food.

Does piece work have a future?

Octinver is a new business and in this early phase of its existence, I have been spending some time thinking about business models. I guess what I do is best described as independent consultancy though I am not entirely happy with that description. One very persuasive approach for the independent consultant, strongly advocated by Alan Weiss, is to use perceived value as the basis for establishing fees and to avoid like the plague using ‘day rates’. He highlights with this guidance the contrast between valuing input as measured by effort multiplied by time as opposed to valuing output directly. On reflection I am convinced that valuing output directly brings obvious benefits for the knowledge worker and for his or her clients; it involves a process of establishing value, a responsibility to provide value and a considerable degree of freedom in how the value is delivered.

It led me to consider how our current pattern of ‘9 to 5’ work has evolved as it appears to a classic example of the ‘effort multiplied by time’ formula. Apart from the obvious fact that the availability daylight probably had something to do with it but I suspect that organised labour began with slavery which then provided the model for patterns of industrial employment. No doubt there is extensive literature on this, ranging from the philosophical through the political to the biographical and one need look no further than Wikipedia to confirm this.

What managers like is control; slavery provided complete control over all aspects of life, wage employment provided pretty extensive control, sanctified through the concept of employment for life which for all its altruism is solidified around the belief that the employer knew best. If managers have control of input then they can manage their resources to generate the output they require.

Given that we have managed to survive and prosper in the developed world without slavery for nearly 200 years, is it possible to envisage a modern society that can flourish without deference to the ticking clock in most if not all instances of what is called work? Is it possible to imagine a more equal society, perhaps not in wealth but in the freedom to decide how to spend time and the confidence to negotiate a value on the output of labour. To keep managers happy the point of control would need to be transferred from input to output; this brings to mind the comparison between ‘push’ and ‘pull’ which is a subject that Hagel and Seely Brown have written about quite extensively. If I am not mistaken it also has something of the ‘kaizen’ approach about it so it is not totally out of sync with recent business thinking.

While it is possible to imagine at least partial manifestations of the ‘pull’ in manufacturing, it requires of me little more determination to see how the ‘pull’ model might work in some service areas of our economy – apart from consultancy that is. Consider for instance security (including the police and fire services), welfare, health care as well as commercial services such as banking. I guess that one of the best examples of a ‘pull’ service might be the lifeboat service in UK which is largely resourced by volunteers. What is also of interest is the increasing prevalence of ‘patient led care’ in the treatment provided by the UK National Health Service. There is experience, then, on which to call for reference when contemplating alternative models of work.

What is really interesting here is that once you get below the surface there is scope for quite radical redesign of working patterns that could be healthier for the individuals and corporations alike.

Is this a good time to talk about trust?

Am I delusional in thinking that the general mindset of the UK population is far more upbeat today than it has been in previous periods of economic difficulty that I can remember? How do you square such a relatively positive outlook with the experience of losing a job, losing savings or seeing the value of a pension plan evaporate in front of your eyes? I don’t really know. But I wonder whether after the genuine anger that follows loss has passed, more people are looking to themselves and to each other for help in working out the way forward rather than expecting the elusive ‘them’ to come up with a solution. This could point to a greater degree of self reliance and decreasing expectations of state support. Both of these developments are probably for the better though I hope that the corresponding reduction in reliance on the state and financial institutions does not lead to a loss of trust in the community.

Perhaps there is an opportunity to catch the mood by introducing a serious attempt to decentralise power; you never know. To quote a quote, Bagehot in the Economist reports that Gordon Brown has written in the Independent, “There is no option I will not consider if it redistributes power.” Bagehot (The Economist, 30th May 2009) goes on to suggest transferring power from the executive to Parliament though he does admit, “Boosting MP’s freedom and remit might seem another strange response to their misdemeanours . But it is necessary and overdue.” Perhaps giving MPs a bigger role in government will instill a greater sense of responsibility. And why stop with Parliament? What about having another look at devolving power to the regions as well as to Scotland, Wales and Northern Ireland? It might just be the right time for the national mood to respond to loosely coupled government and that a central government orchestrating (as opposed to managing) regional activities will see increasing levels of enterprise across the country.

It is not that anyone seriously believes that local politicians as a group are any more honest than their national counterparts or even that the national politicians are particularly dishonest, in spite of the recent revelations of quite unseemly behaviour. The issue is for the state to trust its citizens more, giving them greater responsibility with the corresponding authority to manage local affairs for the betterment of local communities.

There is an interesting irony here because I think that Mrs Thatcher was instrumental in fostering this greater sense of self belief while, if I remember aright, she was also instrumental in centralising power away from regional authorities. Perhaps now is the time to build on the former change to reverse the latter.

Nice, forgiving, tough and clear – all at the same time

Imagine a situation  where two people are arrested on suspicion of a crime. They are interrogated separately so there is no communication between the prisoners who have two choices; to defect (that is,  inform on the other suspect) or to cooperate (with the other suspect, not the police) by saying nothing. I have seen various descriptions of the various outcomes; if they both remain silent, they both go free or suffer a minimal penalty, if they both defect, they both suffer a major punishment while if one defects and the other cooperates, the cooperator suffers the major punishment but the defector goes free and may even reap some reward. This scenario is called the Prisoner’s Dilemma and is, I think, well known in the ‘Game Theory’ world; I believe that it also received much interest in the ’60s and ’70s in the context of the Cold War arms race.  If the situation only arises once, the rational decision is to defect but if the situation arises repeatedly a different optimum emerges.

In the 1970s an academic at Michigan called Robert Axelrod set up a tournament  in which the entrants were required to submit  computer program to play the part of one of the prisoners. The programs were paired of against each other, in the way of a cup competition; each round consisted of 200 cycles of the scenario. The program that won was submitted by an academic from the University of Toronto called Anatoly Rapoport who adopted a very simple strategy called ‘TIT FOR TAT’. TIT FOR TAT cooperated in round one and  then chose to do exactly what the other prisoner had done in the previous round for every round thereafter. This outcome surprised Axelrod and he ran a second tournament sometime later where the challenge was to beat ‘TIT FOR TAT’; not one of 62 entrants succeeded.

‘TIT FOR TAT’ can be characterised as:

• ‘Nice’ in that it never defects first
• ‘Forgiving’ in that it rewards cooperative behaviour
• ‘Tough’ in that it punishes uncooperative behaviour
• ‘Clear’ in that opposing programs (the other prisoner) can work out the pattern pretty easily.

So what is the relevance to business? Perhaps it is in the pertinent questions that are raised about effective behaviours in competitive situations? Who are the prisoners and who the authority structure that can ‘reward’ or ‘punish’? Is business a prisoner in the competitive marketplace and when does cooperation become anti-competitive? Or are business colleagues all prisoners within the business world? What role does performance management have in encouraging or discouraging behaviours? Does it foster nice, forgiving, tough and clear behaviours if these are seen as desirable?

Since Axelrod’s competitions, I believe that there has been considerable development in modelling of the Prisoner’s Dilemma. Eric Beinhocker describes an evolution of ‘TIT FOR TAT’ embodied in a strategy called Fair. This addresses the situation where both prisoners adopt ‘TIT FOR TAT’ and there is the potential for ‘lock in’ to either mutual cooperation or mutual defecting. Axelrod began to look at strategies for situations where the game history suggested that the other prisoner could be bluffed. Lots of interesting stuff and good reading material for those who are so inclined. The Prisoner’s Dilemma is quite well covered in the literature and there is a good general description in a book called ‘The Origin of Wealth’ by Eric Beinhocker, already mentioned ( see pages 221 to 233) and in ‘Complexity’ by Mitchell Waldrop (pages 262 to 265).

The Prisoner’s Dilemma is an example of a ‘non zero sum’ phenomenon; the net loss of freedom if both cooperate is minimal while the net loss of freedom if one or other defects or if both defect is an order of magnitude greater.

Cooperation then gives the best overall outcome for two prisoners but it is unlikely that the majority of cooperations within business will operate on a one to one basis. Inevitably our cooperations are many to many and these can probably be represented usefully as a series of networks with multiple nodes. It is important for the business then to understand how networks operate in order to ensure that our knowledge and competency networks are cooperative, robust and resilient. There is quite a body of academic research in this area which is relevant at many levels within business and the research is important in order to extract  simple rules from complex phenomena (for instance, be nice, be forgiving, be tough, be clear).

Leading people, managing relationships

Recently I came across a list of behaviours which the writer claimed would help me to be effective and productive. At first glance it was quite a surprising collection of characteristics. In the first instance, the writer assumed that the readers would have a belief in what they were doing, that they were aligned with the way in which their organisation was going. His next recommendation was that people should behave with integrity; the ends do not justify the means and, as has been demonstrated in many spheres of life recently, a wrong act can unravel a right outcome. But integrity does not justify innocence or naivete and so people should strive for understanding; in some ways this can seem to be quite a burdensome responsibility and it does not seem to allow for the ‘I was only taking orders’ line of excuse. The understanding should be built with honesty and the integrity should be informed by the understanding. What understanding provides is knowledge and with knowledge comes power which the next behaviour, self control is presumably meant to temper.

I think here the distinction is between using our knowledge to outperform our fellows, which is acceptable and using it to humiliate them, which is not. The writer then seems to underline his point by requiring patience. Are they not the same thing? Perhaps not; perhaps self control acts as a filter on our actions and patience acts to attenuate our thoughts and our emotions; so it is not only how we act that is important but how we think and feel. What patience does is anchor the self control and put it into the context of relationships and what is emerging is a picture of the model which the writer has of how we should behave in a community. We tend to think of patience and self control as being very passive behaviours but in this context they are actually very active behaviours because what the writer is advocating is the building of relationships. We are building the capacity to act when the time is right and to act decisively and with impact. What is clear by now is that the writer is expecting his audience to accept the responsibility he is offering and to act pretty autonomously.

The next behaviour he asks for is true commitment; whoops, where is the ‘get out’ clause? ‘Too late’ is his answer; if we are looking for authority and we want to exercise it responsibly, there is a cost and our full commitment is it. If we cannot give it, we should go back to the beginning and question the vision. Our commitment should be emotional, psychological and intellectual; it is an outworking of the integrity that we agreed to earlier. This commitment is to the cause but that is not enough, we need to be committed to our fellows whoever they may be and to behave well towards them. To those with whom we agree to be co-workers we owe a deeper level of commitment; interestingly, this was touched on today by Steve Farber, a leadership coach, in a conversation starter for Harvard Business Publishing where he was strongly advocating a commitment to mentoring. Read it if you dare to see the word ‘love’ in the context of a working relationship.

So where does this get us? A long way from the ‘work harder and work faster’ view of productivity; a long way even from the ‘work smarter’ view. It gets us to a point where relationships are seen as having an important bearing on our effectiveness and productivity. If that is the case, perhaps HR responsibilities should be transferred back to line.

Productivity and effectiveness

Productivity is elusive. Of course there are those who will argue that it can be measured, which is an undeniable fact in certain well defined circumstances. But if we assume that productivity is a measure of value created for a given amount of effort expended, the extent of the problem becomes apparent. One question is now two questions: how do you measure value and how do you measure effort? The situation can be simplified by equating value with money and effort with time, which simplification has served adequately in the industrial age, a period characterised by extensive mechanisation.

How does it fare in the post industrial era? In an era where value is created by logistics and networks such a simple measure begins to feel seriously inadequate. It seems there is a question of timing to be included in the measures of both value and effort and perhaps a more subjective assessment of quality should also be considered as more and more value is delivered in the form of a service. Already it is clear that any approach based on measuring overall performance is going to become complex and unwieldy so there may be benefit in considering an alternative measure, based on education and behaviours. Identify those behaviours in your colleagues that are likely to deliver good value to your customers and to you; educate your colleagues in those behaviours and then reward them for exhibiting the desired behaviours. You are likely to be rewarding behaviours such as honesty, understanding and commitment which does not seem a bad thing in itself and will do no harm to customer relations and loyalty.

If productivity spotlights the behaviours of individual colleagues, consideration of effectiveness returns attention to the bottom line.  The impact here will depend upon how well you have identified those behaviours that deliver value to your customers. The speed with which the right behaviours feed through to the bottom line will depend, among other considerations, upon the natural cycle of your business which might be measured in weeks or months or years. The longer the natural cycle of your business, the more forward looking you will need to be or the more adept at finding ways to accelerate the impact on your business.

As a caveat, it is important to add that there are occasions when it is expedient also to educate your customers with regard to your value proposition and I say this as a card carrying founder member of the Ryanair Frequent Flyers (though I should add that my membership expired in December 1989 and I am not sure how far the Frequent Flyers survived into the next decade).

The ‘how’ of business is important too

Businesses, even small businesses, sometimes work against themselves. This becomes a problem when the situation is not recognised or when it is recognised and ignored or when it is recognised and glossed over. The telltale signs can include a chronic inability of the business to perform to its true potential or a growing frustration amongst key colleagues which becomes a real issue if they should eventually decide to leave. However in the short term what may appear to be a marginal performance shortfall is unlikely to be the most pressing issue for a business. If a business is growing there are likely to be other priorities and other options; resource shortfalls for instance can be met by investment and recruitment. At the other extreme when things are tight and everyone is stretched, ‘the best may be the enemy of the good’ and in this case ‘good’ may be survival. In either instance, a very good case would need to be made for persuading business leaders to spend much time on what might appear to be fine tuning as all businesses are ultimately ‘needs’ driven.

Though ‘needs’ define the why of business they do not represent the only business driver and recognising other drivers can provide some interesting insights. For instance, ‘needs’ do not define the ‘how’ or the ‘who’. The ‘how’ is very much in the hands of the business leader because he (or she) it is who determines the business culture and who also ultimately determines the organisation and the technology that the business will adopt in order to operate. In the natural flow of events the culture, the organisation and the technology often evolve as the business itself develops. Not only do they evolve together but they also adapt to each other. So what happens when in the fullness of time a business is asked to embrace a significant change in culture or organisation or technology? Or what happens when the technology or the organisation or, perhaps more likely, the culture comes to be regarded as immutable and its evolutionary progress is stalled or even reversed. Some sort of imbalance is introduced to the business which leads to stresses and strains which distort the behaviour of the business and constrain its performance.

Here is a problem, however. Business leaders by and large are not comfortable with relying on any process that can be described as evolutionary. For one reason it sounds like long term deal and for another the process sounds like it is out of their control. Thankfully it is possible to find at least anecdotal evidence that might provide some encouragement for them. In the first instance, a number of the changes that have affected our culture, organisation and technology at a societal level in the past 30 years have followed an evolutionary pattern where the adoption rate is slow initially but then accelerates dramatically, following a characteristic ‘S’ curve as saturation is approached in due course. The growth in sales of mobile phones is an example of this pattern. An item that was seen primarily as a piece of business equipment and supplementary to fixed line telephony has been instrumental in changing the social opportunities and behaviour of a generation in the developed world and has been the means of bypassing the need for costly investment in fixed line infrastructure in the developing world.

So get the change right and it can be the leaders who end up being the limiting factor. One important feature of such changes that must be borne in mind is that they are often ‘pulled’ by the adopters (the ‘out of the leader’s control’ factor) but there is also possible encouragement for business leaders here, too. Multidisciplinary research by various groups under the broad heading of complexity science suggests that it is possible to build models of complex behaviour involving groups of agents that interact according to relatively simple rules. This will not provide a tool for leaders to use to control the evolutionary process but it can provide them with a better understanding of the process with which they can better position themselves to influence it. The words say it all; an evolutionary process calls for an influencing style of leadership rather than a controlling style. It is not right for every situation but if you want to align the organisation, culture and technology of your business, then ‘influencing leadership’ is the way to go. And before you go, remember an effective communication flow of knowledge and information throughout the business process is the very lifeblood of an influencing style of leadership.

There are business tools that can help; one I have used with some success in the past is AIM (Accelerated Implementation Methodology) which is available from Implementation Management Associates.

Old insight, fresh perspective?

When Ralph Stacey looks at the complexity matrix (seen here being used by the medical profession) he drew up some years ago he could be forgiven for feeling a glow of satisfaction. For him it is perhaps ‘old hat’ but for many of the rest of us his matrix provides a helpful fresh perspective on the confusing economic, financial and political climate in which we find ourselves. His matrix suggests that in situations where we are far from agreement and far from certainty having recourse to rational decision making (and this I would qualify to mean linear rational thinking), political decision making or judgement based decision making will not necessarily be very effective. Brenda Zimmerman of York University, Toronto on whose analysis the above reference is based acknowledges that traditional management teaching has concentrated on decision making where (linear) reasoning, politics and judgement can be effective, which focus has left a gap in management teaching. This raises a couple of questions: how useful could the Stacey matrix be in the prevailing circumstances – which can well be described as far from certain and far from agreement? How aware are the current business leaders of this material, given that many of them will have completed their formal education before it was published?

In Stacey’s matrix this region (far from certainty and far from agreement) is divided into two zones, the zone of complexity and the zone of chaos. With reference to the zone of chaos, Zimmerman says, with no little understatement, this is a region ‘… that organizations should avoid as much as possible.’ So, looking on the bright side, let’s assume that we are in the zone of complexity. If traditional management tools are not necessarily effective in this region, what tools are there that we can use?

Some strategic thinkers are looking to see what complexity science can offer in the military sphere and this book by James Moffat serves well as a starting point: Complexity Science and Network Centric Warfare. In amongst the non linear maths there is a wealth of analytical thinking that lays down a foundation for the application of complexity science on which to build models of operations in what is described as the information age.

I don’t want to say more about complexity science here apart from commenting that its use in this context is to help break the mould of traditional command and control structures and to create the philosophical and intellectual framework for de-centralised command and control. Hold the idea of using complexity science in this way while we explore another line of thought.

A recent copy of the Economist includes a special report on the middle class, particularly in emerging markets (Burgeoning Burgeoisie, Economist, 14th February 2009 – to see the link may require a subscription). There is an interesting discussion on who or what are the middle classes but two particular correlations stand out; one between the middle class and economic growth and the other between the middle class and democracy. As the report recognises the former case is easier to make and even it is unlikely to continue without interruption through a recession. Daaron Acemoglu of the Massachussetts Institute of Technology is quoted as attributing the importance of the middle class to growth in the emerging markets to the fact that “… they are more committed than the elite to a mixed, competitive economy.” This is related in the Economist report to Maslow’s hierarchy of needs; I suspect that account also needs to be taken of an economy of exclusivity alongside the economy of wealth.  The former is a zero sum economy while the latter is not; as an emerging middle class starts out with little to lose in either economy it does not have to balance a loss of exclusivity against any gains in wealth. This brings us back to complexity science because it provides one of the perspectives for understanding the dynamics of non zero sum economics as is very ably expounded by Eric Beinhocker in his book, The Origin of Wealth.

What puzzles me in the current climate is that with all the scholarship that has gone into complexity science over the past 20 years I am not hearing more reference to its use in responding to the current uncertainties. Perhaps I am listening at the wrong windows; I hope so because I find much to attract me in the philosophical underpinnings of complexity science and much that I would like to investigate as a means of addresssing the difficulties that present themselves to me.

James Moffat acknowledges the role of the Santa Fe Institute in the early development of this field of multidisciplinary research and the institute provides a treasure trove of relevant expertise and reference material. Ralph Stacey is professor at University of Hertfordshire and was recently interviewed here.