A633.3.3.RB - Complex Adaptive Systems _RutbellGreg

Today, the business world is part of a complex adaptive system. Organizations are complex adaptive systems with interacting parts. In a complex adaptive system, all parts interact with each other according to a set of rules. There is no way to know how organizations will evolve over time. We cannot precisely or accurately state what the future will be or control changes. The world is changing quickly and all organizations must be adaptive to survive. The business world is really part of a complex adaptive system in which you cannot predict the future or control developments in a highly precise way. The key to survival and leadership is being able to adapt responsively as changes happen. In the past, successful business leaders played by the rules, followed best practices, developed models and engaged in reengineering based on the business situation and issue. The goal was to continuously and incrementally improve on those things their businesses were already doing. However, this has all changed. The world is changing so fast with advancements in technology in a volatile world that this approach no longer works. Successful leaders must have clear vision, objectives, operating guiding principles and a willingness to challenge the way things have been done in the past, i.e., status quo. Examples from the technology industry and from relatively large diversified companies show that successful firms adapt well to significant change. Yet, many business leaders recognize that they have to create more adaptive organizations to respond to change. This awareness is just the first step because many managers, executives and business professionals feel their organizations are not very good at dealing with today’s rapid changes. For any company to succeed, it must learn to adapt. (Fulmer, 2000) The ability of some companies to adapt is demonstrated by the fact that many have been leaders in their industries for years. Examples from the oil, aerospace and industrial equipment industries and from relatively large diversified companies show that successful firms adapt well to significant change. For example, ExxonMobil, Chevron and Royal Dutch Shell have led the world's petroleum industry for over a century. Boeing and European Airbus have dominated the commercial aerospace industry. Caterpillar and John Deere have dominated the construction, farming and earth moving equipment industry. (Grant, 2013) Given today’s chaos, confusion and uncertainty, many executives and organizations are afraid to act and are not sure what to do. They tend to fear the risks of changes and a new situation, instead of being focused on its potential outcome business results and rewards. Executives often want to undergo extensive planning with detailed analysis including models and simulations to determine situational responses, but long-term planning is increasingly difficult in a rapidly changing environment and world. While some planning is still necessary, we need to be able to respond to change and adapt. In this new business environment, the first step is to see the world as it really is and recognize what is happening in order to adapt. Develop the foundations of an adaptive organization based on three concepts similar to the sides of a triangle: landscapes, learning and leadership. In other words, provide leadership in a learning organization to adapt the organization to its landscape more effectively. Today, the business environment is like a rugged mountain landscape, which evokes many new forms that must then compete to move up the peaks usually through rough and rugged terrains. This competition can result in many new types of organizations offering different types of products and services. (Fulmer, 2000) To create an adaptive culture in any organization, facilitate individual learning by encouraging people to keep learning and to experiment, and by hiring smart people. Ask, challenge and encourage employees to share what they have learned and to apply their new knowledge in projects, assignments and mentoring others. The present mountainous rugged landscape requires strategic planning, however, the planning process must change because the traditional planning takes too much time and depends too much on future models in a volatile environment that works against predictability and probability. Think of strategic planning as a process of developing a “consistent pattern of decisions and actions” to increase the chances of achieving goals. Use strategic planning to help people understand the current situation and to identify ways to prepare for the future. Planning can facilitate adaptive behavior if you emphasize critical thinking. Assess what your organization needs to do to fit its environment more effectively now and in the future. Engage in active observation and try to understand both competitive behavior and key customer values. Push for faster and rapid improvements based on reducing costs, improving quality, and enhancing creativity and innovation (ideas). Given adaptive systems’ uncertainty, allow space for creativity and learning in organizations. Keep goals simple – incorporate key company values and make sure everyone understands the objectives. Structure the organization for adaptation. Be able to “operate at the leading edge” as the organizing principle. Decentralize, increase the span of control at every level, use temporary structures as much as possible, develop powerful information systems and remember that the structure will continually evolve and change. (Fulmer, 2000) For example, is education a complex adaptive system? Most people think Boeing is associated more with airplanes more than education, but in reality it turns out that Boeing’s educational portfolio and resources is massive. Millions of hours each year of course delivery instruction to approximately 170,000 employees across 45 countries! This makes Boeing a university too! Boeing leadership asks "Why is it, after so much is being invested in STEM (science, technology, engineering and mathematics) education, research and practice, that we still have problems finding qualified people to work in STEM disciples? "The educational system that produces the critical talent for the United States’ future security and prosperity is complex …It is composed of systems nested within subsystems, each operating on multiple temporal scales where observable causality is often hidden… Changes to this system emerge through evolutionary processes and are encumbered by complex physical, behavioral, and social phenomena as well as competing interests. Faced with overwhelming complexity in the learning ecosystem (including shifting economic, political, and business environments), we tend to focus primarily on issues that are relevant to the cultural boundaries within which we operate…" " behaviors are analyzed through the lens of complex adaptive systems to better conceptualize the current educational ecosystem. Therefore, we plan on identifying methods to model the larger system. A deep understanding of this structure (exponential complexity encountered as knowledge is distributed through the organization) is required in order to transcend subcultural boundaries and meld a unified framework. From this might emerge a fresh composite that values different cultural and situational perspectives". Today, there is not a labor shortage but a skills shortage. Skills are needed to fuel creativity, innovation and ideas. If we look at some of the key concepts of a complex adaptive system including emergence, self-similarity and self-organization it doesn't sound like the usual stuff for university or does it? Is education something to be implemented or is it something that just happens? Or is it a complex adaptive system that is needed to support environments where learning by doing takes place and where engagement happens inside and outside the classroom? (Talbert, 2011) References Fulmer, William E. (2000). Shaping the Adaptive Organization: Landscapes, Learning and Leadership in Volatile Times. New York City: AMACOM (American Management Association). Grant, Robert M. (2013). Contemporary Strategy Analysis (8th ed.). The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom: John Wiley & Sons Ltd. Obolensky, Nick (2010). Complex Adaptive Leadership: Embracing Paradox and Uncertainty. Farnham (Surrey), England: Gower Publishing Limited. Talbert, Robert (2011). Education as a complex adaptive system? Retrieved http://chronicle.com/blognetwork/castingoutnines/2011/09/27/education-as-a-complex- adaptive-system/