Management 3.0 - Complexity Thinking

Complexity Thinking

Agile Management © 2010 Jurgen Appelo version 0.1

Complexity Thinking

Stop treating teams and organizations as machines.Start treating them ascomplex (living) systems.

Complexity Thinking

A Story of a Software Business

unhappy customersOnce there was a software business with

quality and productivityCustomer satisfaction was low because of low

lack of skills and disciplineQuality and productivity were low because there was

pressure on teamsCustomer dissatisfaction increased

no time foreducation

Stress at work meant

no skills andno discipline

No education meant

unhappy teamsCustomer pressure led to

decreasingdemotivation

Lack of skills and unhappy customers added to

decreasingproductivity

Decreasedmotivation

added to

Causal Loop DiagramWe call this a

Diagram of Effects)(Some call it a

vicious cyclesIt shows the business suffered from

manyAnd not just one, but

revenues decliningManagement saw

cutting budgetsThey tried to supportimprovement while

Meanwhile, technological pressure was increasing

And due to the crisis, economic pressure also went up

Needless to say, this business was

DOOMED

Needless to say, this business was

DOOMEDThen suddenly,managementstarted learning...

Software Teams AreComplex Adaptive Systems

A software team is a complex adaptive system (CAS), because it consists of parts (people) that form a system (team), and the system shows complex behavior while it keeps adapting to a changing environment.

It’s the same with brains, bacteria, immune systems, the Internet, countries, gardens, cities, and beehives.They’re all complex adaptive systems.

General Systems Theory

Autopoiesis (how a system constructs itself)Identity (how a system is identifiable)Homeostatis (how a system remains stable)Permeability (how a system interacts with its environment)

Ludwig von Bertalanffy(biologist)1901-1972

Study of relationships between elements

Cybernetics

Goals (the intention of achieving a desired state)Acting (having an effect on the environment)Sensing (checking the response of the environment)Evaluating (comparing current state with system’s goal)

Norbert Wiener(mathematician)

1894-1964

Study of regulatory systems

Dynamical Systems Theory

Stability (stable states versus unstable states)Attractors (systems getting sucked into stable states)

Study of system behavior

Game Theory

Competition versus cooperationZero sum games versus non-zero sum gamesStrategies (including evolutionary stable strategies)

John von Neumann(mathematician)

1903-1957

Study of co-adapting systems

Evolutionary Theory

Population (more than one instance)Replication (mechanism of making new instances)Variation (differences between instances)Heredity (differences copied from existing instances)Selection (environment imposes selective pressure)

Charles Darwin(naturalist)1809-1882

Study of evolving systems

Chaos Theory

Strange attractors (chaotic behavior)Sensitivity to initial conditions (butterfly effect)Fractals (scale-invariance)

Edward Lorenz(meteorologist)

1917-2008

Study of unpredictable systems

And more...

Dissipative systems (spontaneous pattern-forming)Cellular automata (complex behavior from simple rules)Genetic algorithms (adaptive learning)Social network analysis (propagation of information)

Study of all kinds of systems

The Body of Knowledge of Systems

Complex systems theory is the study of complex systems using multiple system theories

Management Is in the Systemor in the Environment

Management “leading” a hierarchy of “followers” is not a very useful

metaphor

Management in the SystemManagers are just like the other people,only with a few “special powers”

Management in the EnvironmentOr... managers are part of the team’s

context,constraining and steering the system

System boundaries are fuzzy, so you can choose...

System Environment

This depends on the problem you want to solve

or

Either way, you are never an independent observer looking down at

the system

Self-organization IsBetter than Control

“Self-organization is the process where a structure or pattern appears in a system without a central authority or external element imposing it through planning.”

http://en.wikipedia.org/wiki/Self-organization

Self-organization is thedefault behavior

in complex adaptive systems

Managers want self-organization

to lead to things that haveValue

Anything that is not constrainedby management will self-organize

Darkness PrincipleEach part in a system cannot know all that goes on in the rest of the system. If a team member “knew” an entire software project, the complexity of the whole project would have to be present in that person.

Cilliers, Paul. Complexity and Postmodernism. New York: Routledge, 1998.

That’s why teams must aggregate

their limited mental models

Many System BehaviorsAre Nonlinear

Reinforcing feedback loops

Complex adaptive systems arecomplexbecause of

Stabilizing feedback loops

Multiple causes per effect

Opposing effects per cause

Time delays between cause and effect

Complex systems are complex because all diagrams are simplifications of the real complexity in those

systems

Software Teams MustDeal with Unknowns

Incompressibility Principle“There is no accurate (or rather, perfect) representation of the system which is simpler than the system itself. In building representations of open systems, we are forced to leave things out, and since the effects of these omissions are nonlinear, we cannot predict their magnitude.”

Cilliers, Paul. "Knowing Complex Systems" Richardson K.A.Managing Organizational Complexity: Philosophy, Theory and Application.Greenwich: In-formation Age Publishing, 2005. Page 13.

Known unknownsThe things you know that you don’t know

Like... who gets the next joker when playing a card game?

Unknown unknownsThe things you don’t know that you don’t know

Like... ehm?

The unknowns are different per personThat’s why people get together and make joint

decisions

Software Teams HaveEmergent Properties

EmergenceSome properties and

behaviors of teams cannot be traced back to individual

people

Emergent behaviors of a team enables collective decision making without

central control

“A complex system is more than the sum of its parts.”

Unfortunately, emergent properties and behaviors are

largelyunpredictable

Complexity Is Different fromComplicatedness

The structure of a system can be

Complicatedvery hard to understand

Simpleeasy to understand

The behavior of a system can be

Orderedfullypredictable

Complexsomewhatunpredictable

Chaoticveryunpredictable

You can try to simplify a system to make it understandable

But you cannot linearize the system to make it predictable

7 Principles of Complexity Thinking

Agile managers work the system,not the people.

1. Software teams are complex adaptive systems

2. Management in the system or in environment

3. Self-organization is better than control

4. Many system behaviors are nonlinear

5. Software teams must deal with unknowns

6. Software teams have emergent properties

7. Complexity is different from complicatedness

Exercise1. Discuss complexity thinking with your group

Nonlinear effects Unknown unknowns Emergent behavior

2. Create an illustration or visual representation3. Explain the case to the entire class

30 minutes

This presentation is part of

Agile Managementa course developed by Jurgen Appelo

http://www.jurgenappelo.com/training/

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