Doug Garnett wrote a guest article on the Strategy in Praxis Substack titled The Fundamental Complexity of Business.
« I was frustrated by exaggerated claims that scientific practices would create predictability. While there is great value in business science, such predictability is not possible.
« A useful way to think of complexity in both science and business starts with emergence. Amid complexity:
- Vast numbers of parts interact with each other and with their environment.
- These interactions cause both parts and environment to adapt and change.
- Results emerge at a macro-level from micro-level interactions and adaptation.
- These results are non-linear gestalts—more than and different from a sum of the parts.
- Critically, studying the parts cannot predict what will emerge.
- Complexity is circular and continual. Parts and environment adapt in response to what emerges leading whole results to also adapt, and so on. »
« Every business success, then, is a whole result emerging as vast numbers of parts interact and adapt. While this might seem confusing, successful paths in complex worlds are usually simpler than paths of intricate bureaucratic operation. Tremendous advantages come to those businesses which perceive where these paths lie. »
« Further, the most critical issues in business — profit, cash flow, demand, and success — are emergent results. Companies only succeed with emergent gestalts more than and different from a sum of the parts. While we do not control emergence, the actions we take (or do not take) have tremendous influence on whether what emerges leads to success. »
« One reason this is missing from business training is that organization and process are studied using what is called ceteris paribus — the assumption that if all else is held equal then we can determine best organization styles or processes. Yet within a complex world, all else is NEVER equal and those things not equal are at least as important as organization. »
« What complexity reveals is that business success requires our fully human abilities. »
« Why Do We Care Deeply about Complexity?We can only improve business success by understanding how business works and this cannot be done without complexity. Fortunately, its new understanding leads to two key results. First, complexity reveals unusually effective paths to success — paths which also build resilience. Of equal importance, complexity leverages the full human abilities of managers — abilities evolution has kept because humans have lived, always, within inherently complex worlds. »
« Where traditional business thinking demands practitioners reject what their eyes and ears discover, complexity requires that we be naturally curious about how business works. And while many fear uncertainty in business, complexity shows success is possible only because of uncertainty — especially the dynamic uncertainty always present in business practice as often discussed in this newsletter. »
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