1. Complexity & Systems Thinking Patrick Albina & Dr Erin Evans PMI National Conference 25 th May 2015 Patrick Albina Mobile: 0412 182 581 patrickalbina@illuminateconsultants.com.au www.illuminateconsultants.com Dr Erin Evans Mobile: 0448 848 016 Dr.erin.evans@gmail.com

2. The State of Play Today According to CEOs In 2010 IBM conducted a study of over 1500 CEOs worldwide. – 66 Countries – 33 Industries What do you think was their number 1 issue?

3. The Number 1 issue – Complexity The State of Play Today According to CEOs

4. What they said… …they expected that complexity will rise and more than half of the CEOs doubted their ability to manage it. “We occupy a world that is connected on multiple dimensions, and at a deep level — a global system of systems.” “It is subject to systems-level failures, which require systems-level thinking about the effectiveness of our infrastructures.” “It is this unprecedented level of interconnection and interdependency that underpins the most important findings from the CEOs.” “We occupy a world that is connected on multiple dimensions, and at a deep level — a global system of systems.” “It is subject to systems-level failures, which require systems-level thinking about the effectiveness of our infrastructures.” “It is this unprecedented level of interconnection and interdependency that underpins the most important findings from the CEOs.” The State of Play Today According to CEOs

5. “Complexity should not be viewed as a burden to be avoided; we see it as a catalyst and an accelerator to create innovation and new ways of delivering value.” Juan Ramon Alaix President Pfizer Animal Health “Complexity should not be viewed as a burden to be avoided; we see it as a catalyst and an accelerator to create innovation and new ways of delivering value.” Juan Ramon Alaix President Pfizer Animal Health The State of Play Today According to CEOs

6. The State of Play Today The foundations of “modern” management are over 100 years old… They were developed for the Industrial Age The focus was on physical assets and efficiency There was a dominant paradigm of control Predictable, bureaucratic and conformist mindset Ref: Mary Uhl-Bien, BNSF Railway Endowed Professorship in Leadership at Texas Christian University (TCU)

7. The State of Play Today We have entered a new age—a Knowledge Era Information is readily available, and often over abundant Focus is on knowledge, adaptability and learning Need to enable intellectual & social assets, and embrace diversity Ref: Mary Uhl-Bien, BNSF Railway Endowed Professorship in Leadership at Texas Christian University (TCU) Our current organisational models are grounded in bureaucratic principles and are not working in the modern environment.

8. Activity Picture in your mind a typical Organisational Chart…

9. Activity

11. What is Complexity? Complex ≠ Complicated o Jumbo jets are complicated o Mayonnaise is complex

12. Organisations as Machines Predictable Repeatable Measureable Standardised Control Deterministic Driving Change Steering Committee

13. Organisations as Complex Adaptive Systems Characteristics Many partsNumerous actors in the system (stakeholders) Rich interconnectivityStakeholders are all linked Multiple PurposesThere is diversity of views and perspectives RecursiveTeams, projects, functions, organisations, corporations, industry, sectors Emergent propertiesA natural order and way of working Sensitive to initial conditionsChanges to initial assumptions can have a large impact Simple rulesSimple interactions for the actors in the system

14. Complex Adaptive Systems https://www.youtube.com/watch?v=ctMty7av0jc https://www.youtube.com/watch?v=xYl4m0xFcCU

15. A New Framework for Decision Making Simple – Known Best practice applied Clear cause & effect One obvious solution Repeating patterns Complicated – Knowable Good practice applied Cause & effect discoverable More than one right solution Expert diagnosis required Complex - Retrospectively knowable Emergent practices required Cause & effect understood retrospectively No clear solution with competing ideas Collaborative learning and adaptation Chaotic – Incoherent High turbulence No clear cause & effect Unknowables Many decisions to make – no time to think Decision-Approach Framework sense-categorise-respond sense-analyse-respondprobe-sense-respond act-sense-respond Emergent practicesGood practices Novel practicesBest practices Management by Intuition Management by Fact Pattern- based Leadership Hero Leadership

16. ACTIVITY The underpinning principles of complexity…

17. SELF MANAGING TEAMS Clear individual objective: Clear enough to promote purposeful action but not too specific as to restrict the outcome to a set pattern. Underlying common purpose: Explicit purpose or implicit – but clear to all. Clear boundaries: Look at the nature of relationship across boundaries rather than the ‘who-is-in- charge-of-who’ (note that in this exercise the facilitator is technically in charge but that does not help the outcome). Discretion and freedom of action: No need to wait for permission but respectful of others’ rights to have the same. A few simple rules: Sufficient to enable action and prevent chaos. Skill/will of participants: Sufficient to perform the task and meet the objective (lack of either can undermine the process) Continuous feedback: Allowing adaptation to the reality that is present. A tolerance of uncertainty and ambiguity: The activity exists on the edge of chaos and is ‘far from equilibrium’.

18. Managing Complexity

20. Arnie Levin, New Yorker, December 27, 1976

21. SEEING COMPLEXITY MEANS BEING ABLE TO “SEE”... Interrelationships rather than view changes in fragments that appear to us as linear cause- effect chains, and Processes of change over time, rather than see change as snapshots.

22. Unintended Consequences of Policy in Complex Dynamic Systems Antibiotic resistant strains Road improvements increase traffic Antilock brakes promote more aggressive driving Low tar cigarettes cause greater carcinogen intake Flood control reduces incidence but increases severity War on drugs strategies escalate crime strategies Electric and hybrid cars increase travel

23. Systems Thinking Systems Thinking [is] a way of thinking about, and a language for describing and understanding, the forces and interrelationships that shape the behavior of systems. This discipline helps us to see how to change systems more effectively, and to act more in tune with the natural processes of the natural and economic world. Peter Senge, The Fifth Discipline Fieldbook

24. Some benefits for Managers Systems Thinking... – Helps us to join up our thinking about challenging issue – Helps us recognise hidden and unintended consequences – Enables us to think deeper and wider about complex systems – Allows us to change our behaviour – Expands the choices available to us and focus on higher leverage changes

26. A System of Systems Methodologies (SOSM) PARTICIPANTS UNITARYPLURALIST CONFLICTUAL/ COERCIVE SYSTEMS SIMPLE Simple- Unitary Hard Systems Thinking (eg systems analysis; systems engineering; OR) Simple- Pluralist Soft Systems Thinking (eg SSM, Ackoff) Simple- Coercive Emancipatory Systems Thinking (eg CSH ) COMPLEX Complex- Unitary Socio-technical Systems Approaches Organizational Cybernetics (eg VSM ) Complex- Pluralist Soft Systems Thinking Complex- Coercive

27. Summary and Questions