CH3 From Complicated to Complex

• In 1882, the Ottoman regime could predict that Tarek, a poor pious Muslim protesting reforms, posed no threat due to limited reach.
• By 2010, Tunisian authorities had extensive data on Tarek (al-Tayeb Mohamed Bouazizi), but could not foresee the impact of his self-immolation in Sidi Bouzid.
• Bouazizi's act triggered protests, recorded by his cousin, and rapidly spread via YouTube and Facebook, leading to uprisings in Cairo, Libya, and Syria within months.
• The two Tareks highlight the paradox: increased technological progress coincides with diminished predictability.
• Technological progress exacerbates unpredictability.
• Traditional "clockwork universe" management is ineffective due to the complexities it creates.

Comets and Cold Fronts

• Edward Lorenz, working at MIT in 1961, aimed to bring clockwork determinism to weather forecasting using computers.
• While events like Halley's Comet could be precisely calculated, weather remained elusive.
• Weather predictions changed due to rounding errors in initial conditions.
• Lorenz entered .506 instead of .506127 from a printout, causing drastically different simulation results.
• A small input error led to large, unpredictable changes in weather simulations, revealing weather's interconnectedness and volatility.
• Tiny events, like a butterfly's wings, affect larger currents and undermine attempts at reliable forecasts.
• Lorenz's findings led to the phrase "the butterfly effect."
• Lorenz presented a paper titled "Does the Flap of a Butterfly's Wings in Brazil Set Off a Tornado in Texas?"

Defining Complexity

• Lorenz's butterfly effect demonstrates the phenomenon of complexity.
• Complexity, unlike simple or intuitive problems, is technically restrictive and baffling.
• Complex systems have diverse, connected elements that interact frequently, leading to extreme fluctuations and unpredictability.
• A small disturbance can trigger a series of responses, leading to unexpected outcomes due to numerous interactions.
• Nonlinear change: output is not proportional to input.
• Y = 1.05x represents a linear function.
• Y = 5x: represents nonlinear function and defy intuitive growth.
• Complex systems: nonlinearity, initial differences have massive consequences.

Chess as a Metaphor

• The game of chess demonstrates how nonlinear situations exceed our predictability.
• There are 197,742 ways for players' first two turns and 121 million possibilities by the third move.

Nonlinear Escalation

• Lorenz's butterfly effect involves uncertainty, not just the escalation of minor inputs.
• Seemingly insignificant inputs may or may not result in nonlinear escalation.
• The butterfly's fluttering must align with other conditions to lead to a distant hurricane.
• Understanding initial conditions and forces is insufficient for predicting outcomes.
• Complex systems necessitate impossible amount of data due to number of causes and event links.
• A little flap can prevent as well as causing a tornado.
• Weather is linked to interdependent variables, weather development has a wider range of outcomes than a comet.

Misuse of the Butterfly Effect

• The term “butterfly effect” in popular culture is often misused and is almost always synonymous with “leverage”.
• The butterfly effect describes small things with a big impact.
• Small things in a complex system may have no impact or a massive one, and it is virtually impossible to know which will turn out to be the case.

Transition to Complexity

• The broad spectrum of possible outcomes disrupts conceptual clockwork.
• Communications technologies have created a dense tangle between individuals and actors.
• Current environment is complex

Emmylou's Wayward Swirl

• The world of Emmylou, born in 2014, is defined by instant information and fast transportation.
• Events, products, nations, phenomena, and individuals are increasingly connected.
• The Dreamliner's assembly relies on sources from multiple countries.
• Interdependence is enhanced by digital connectivity - crowdsourcing, trends, and systems.
• Tiny increment of time now matter.

Speed

• Newspaper from a century ago took a full day to break stories, The L.A. Times used a robot to break a story.
• Commercial realtors charge a premium for placing traders closer to servers.
• Transatlantic cable cuts trade time by 5.2 milliseconds and "speed is" money.
• Armies were limited previously until technology increased speed like Jackson's troops covered 646 miles over 48 day period.

Side Effects of Technology

• Technology, like enhanced transportation and communication, increases unpredictability.
• Speed with interdependence means that any action in any given time frame is now linked to vastly more potential outcomes.

Modern Day

• Boeing's outsourcing allows events in multiple countries to disrupt operations.
• Natural disasters in Sweden, exchange rates, and supply chain management is critical.

Impact of Speed and Interdependence

• Bouazizi's self-immolation quickly toppled governments.
• New technologies allow disenfranchised actors to create "butterfly effects."
• Terrorists, insurgents, and cybercriminals benefit from this to cause death and wreak havoc.
• Hacker sent about the White House, the Dow Jones fell 143 point
• Dave Carroll's video about United Airlines, "United Breaks Guitars", caused the company's stock to fall 10 percent.
• The global aid system has transitioned to “many to many” market
• Practitioners use “discontinuity,” “disruption,” or the military acronym VUCA (volatility, uncertainty, complexity, and ambiguity).

Square Peg, Round Hole

• Great thinkers, including Henri Poincaré, have observed complexity.
• Warren Weaver's 1948 paper, "Science and Complexity,” discusses science aims.
• Sciences concerned themselves w/,agnetism and planetary rotation.
• Living organisms present situations in which a half-dozen. traits, he noted, are found in ecosystems, economies, and political systems.

Historical Ecological Complications

• Once scientists, historians, and journalists began looking, evidence in support of Weaver's observation was everywhere.
• Weaver described the greyback beetle problem in Queensland, Australia, and learned of the Rhinella marina, or cane toad.
• Cane toad multiplied and spread, at fish/frogs/small birds and crabs.

Danger of Ecological intervention

• List of catastrophic attempts at ecological intervention stretches and can spread like crazy: only if some slight properties of the environment had interacted differently or if the base number had been marginally different.
• Treating an ecosystem as a machine with predictable trajectories from input to output is a dangerous folly

Economic and Linear Attempts

• Economic system are complex knots of human factors that confound attempts and control.
• Frederick Hayek was against state-run economic planning. and "state-run economic planning."
• There becomes too many possibilities for a prescriptive instruction card + butterfly effects in the economy.
• Complexity only grown denser economies have globalized like hacker attack on AP.
• Prediction problems are increasing

Folly of Forecasting

• Average forecasting was at a 47-93% average error of the United States analyst.
• Debates still rage about whether to exert even slight interventions like adjusting discount rates, but the graveyard of centrally planned economies such as the Soviet Union's.
• Attempts to control complex systems by using the kind of mechanical, reductionist thinking championed by thinkers from Newton to Taylor tend to be pointless at best or destructive at worst.

Back to Management

• Frederick Taylor's managerial solutions were unequivocally designed for complicated problems rather than complex ones and the Midvale Steel Works factory floor was a cacophonous circus.
• Taylor's design and organization were structured and were analogous to those of mechanical devices: Tasks moved from one of the factory to the next and could not organically spread to others.
• Inversely, a single innovation could not go wrong: companies would start over the course of years.

Predictability of Management

• Predictability allowed Taylor to break complicated processes down and at a larger scale, to divide whole organizations into independent departments.
• This allowed the manager's capacity for calculation, prediction, and control.
• As a result, gifted managers tried to create hierarchical ones to know any problem in it entirety has never faded.

Unpredictability

• In Iraq, tactics was linear and external environment changed and we believed in better solutions than others.
• In fact, we were as bureaucratic as anyone else.

The problem domains

• The ability to predict is a criteria, with unpredictable ones being tricky over a timescale and framing things in terms of timescale.

The New World

• Local conversation and letter exchange might be squeezed into a few hours of explosive social media escalation.
• This could move only so fast and can be brought to market only so fast although unpredictable, stratigists could predictevent further than we can now.

Factors

• Factors may increase uncertainty like any person access to the Internet which allows with cleaniness products to become a threat because its unethical as well.
• To many events simeltaniously with small groups communicating causes way to be sure which of these events will transform into a threat.
• Were unthinkable thirty years and “viral” hints resemble organized or ecosystem.

Big Data Solutions

• Cutting edge technology provided with situational awareness.
• In a simpler world that would have been value but it created increased complexity and the more we try, the we get.

Data Is Not A Predictor

• Retailers track and can shift political+economic but data is not predictor for long term prediction.
• This explains complex but can tell can happen
• Cannot see when when and why+where will
• Data may enable, inevitably from those will depart
• Thanks to the wayward swirl of an interconnected, complex, nonlinear environment which created a wayward swirl of interconnected.

Managing Volatility

• Force understood little this to planning better that a "good management".
• Civilian organizations that are encountering problem is is evidenced by the increasingly shorter lifespan of firms.
• Fortune 500 firm was expected to last but last the of 2011 featured list of 1955. Eighty seven of kept for companies for bankrupt + forced to completely and would unrecognizable today.

Ecosystems Emerge

• Plan over their control that give them an ability not being able to help with ritual which presumes present.
• Henry Mintzberg saying is "Setting oneself on a predetermined course in unknown waters is the perfect way to sail straight into an iceberg."

Recap

• The technological changes of recent decades have led to a more interdependent and fast-paced world of complexity.
• Increase ability to decrease the greatly that are hard to solve This unpredictability is fundamentally incompatible with reductionist managerial.
• Models based around planning and prediction and new demand new approach.