Download PDF Winter Issue of The Bridge on Complex Unifiable Systems December 15, 2020 Volume 50 Issue 4 The articles in this issue are a first step toward exploring the notion of unifiability, not merely as an engineering ethos but also as a broader cultural responsibility. Leadership for a Complex Enterprise Thursday, December 17, 2020 Author: Jeffrey Wilcox and Dinesh Verma A decade ago we participated in a small colloquium on systems thinking. The people gathered were interested in defining complexity from a pragmatic perspective. The views were different, subjective, even confusing. We were tempted to conclude that complexity may be no different from beauty: it was all in the eye of the beholder. This is often the case with meetings and conferences on complex systems. For an organization to successfully develop and deploy complex systems, first it must transform itself into a complex enterprise. We posit this based on our practical experience with Conway’s law, which states that “organizations are constrained to produce systems that mirror the information structures of the organization.” Each of us has over 30 years of experience dealing with complex systems challenges and the organizations that seek to address them, and can testify to the fundamental truth of this adage. To solve a complex challenge it is necessary to build a complex organization with the richness of structure sufficient to the task at hand. Complex Enterprise as Operating System What does it mean to transform into a complex enterprise? A useful analogy is the operating system. Every enterprise has a set of communication structures, behavioral norms (i.e., culture), incentive structures, learning mechanisms, sensing mechanisms, and processes for allocating decision rights. This operating system represents the platform from which an organization engages with the world, and its limits represent the limits of the organization’s potential impact. The operating system of today’s organizations evolved from over a century of attempting to eliminate complexity from operations in favor of predictability. Today’s organizations attempt to model the work of the organization and break it down into components that can be solved separately and then recombined. Complex systems, however, are more than the sum of their parts, and something essential is lost in the decomposition and subsequent reconstitution of a problem. It will take a new kind of operating system to engineer complex adaptive enterprises. This will in turn require new considerations for leadership. Enterprise Leader as Gardener vs. Chess Master Leaders are the heartbeat of the operating system. They determine who gets access to what information and when. They determine who has decision rights and they set the incentive structure that guides behavior. Leadership in the age of complexity looks very different from the leadership norms in today’s enterprises. This can be thought of in the often-used analogy of the chess master and the gardener. The operating system of today follows a leadership model focused on command and control. Like a chess master, the leader is expected to deploy the pieces (resources, employees) in predictable moves toward a clear goal. Limited assumption of individual autonomy (chess pieces move only in specified ways) prevents people from contributing based on the fullness of their abilities. But complex enterprises often have to contend with a dynamic context, evolving goals, and changing rules. What is required is a leader who acts more like a -gardener, whose focus is on creating and holding space for the team to reflect and feel empowered to serve the mission of the organization. The leader embraces complexity by allowing the resources to self-organize in pursuit of the mission, while protecting them from external forces and weeding out bad actors. The leader uses the following tenets in this new operating system: Default to open. Perhaps nothing is more important in a complex operating system than the free movement of ideas and knowledge throughout the enterprise. The old model is based on “need to know”: Who gets to be in what meetings, who is on what email distribution? The new model is a “need to share” presumption that all work is done in the open. If everyone has access to information, they are better able to contribute to the team’s mission. Choose principles over rules. Former US treasury -secretary Henry M. Paulson (2006) observed that the International Financial Reporting Standards were “principles-based, rather than rules-based.” He suggests that a system organized around a small number of principles (concepts or ideas) is better able to deal with emergent (new or unique) situations than a rules-based system. He characterizes the consequence of a rules-based regulatory approach as “an ever-expanding rulebook in which multiple regulators impose rule upon rule upon rule.” This leads to a system that is “prescriptive and leads to a greater focus on compliance with specific rules.” Foster cognitive diversity. To create a rich dialogue that expands the palette of possibility the leader must build diverse teams from the outset and ensure that every member is able to contribute to the fullness of their gifts. Experiment, then reflect. The leader must foster an environment of experimentation and reflection. Complex systems need to be explored through constant tinkering and questioning. The goal is not to focus on a zero-failure mindset, which breeds fear, which quashes creativity. Mistakes are opportunities to learn and explore new space. A useful analogy here is an orchestra versus a jazz combo. A mistake by a player performing an orchestral piece can be devastat-ing to the performance. A “wrong” note played by a jazz musician can send the combo off in a new—and potentially richer—direction. Until the enterprise leadership model changes, it will not be possible for leaders, companies, industries, or the economy to tap the fullness of their technical prowess or of people’s gifts, and they will continue to fall short of solving the world’s complex challenges. As Donella Meadows (2008, p. 167) reminds us, “Systems thinking makes clear even to the most committed technocrat that getting along in this world of complex systems requires more than technocracy.” Indeed, we must summon our full humanity. References Meadows DH. 2008. Thinking in Systems: A Primer. White River Junction VT: Chelsea Green. Paulson HM. 2006. On the competitiveness of US capital markets. Remarks, Economic Club of New York, Nov 20.  Research Colloquium on Complex Systems, June 24, 2010, Hoboken, New Jersey, sponsored by the School of Systems and Enterprises at Stevens Institute of Technology. About the Author:Jeffrey Wilcox is vice president for digital futures at Lockheed Martin Corporation. Dinesh Verma is executive director of the Systems Engineering Research Center and former dean of the School of Systems and Enterprises at Stevens Institute of Technology.