The Theory and Application of Complexity Science Helsinki 12 November 2004

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The Theory and Application of Complexity
ScienceHelsinki 12 November 2004

• Prof. Eve Mitleton-Kelly
• Complexity Research Programme
• LSE
• Visiting Professor, OU
• www.lse.ac.uk/complexity

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Outline

• Brief outline of the theory of complex evolving
  systems
• A case study Rolls-Royce Marine

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What are complex systems?

• Multi-dimensional non-linear
• Social, cultural, technical, political, economic
• Have a set of inter-related characteristics that
  influence each other
• Self-organise, co-evolve, emergent properties ...
• Can create new order
• Complexity shifts the emphasis from objects to
  relationships

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Some Key Characteristics of Complex Evolving
Systems (CES)

• Connectivity interdependence
• Emergence
• Feedback
• Self-organisation
• Co-evolution
• Far-from-equilibrium
• Exploration-of-the-space of possibilities
• Path dependence
• Historicity
• CREATION OF NEW ORDER

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How do these generic characteristics apply to
human systems and organisations?What is
relevant?What is appropriate?Why CES?
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Human Organisations

• Are able to
• Self-organise spontaneously come together to
  undertake an activity not directed by external
  agency
• Co-evolve influence each other and are able to
  change their behaviour
• Create intricate networks of relationships
  sustained through communication and other forms
  of feedback, with varying degrees of connectivity
  inter-dependence

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• Create something new, surprising and unexpected
  that is emergent
• Although heavily influenced by their history and
  culture they can transcend both when necessary
• When they meet a constraint they are able to
  explore the space of possibilities and find a
  different way of doing things, i.e. they are
  creative and innovative
• Can create new ways of organising, working,
  thinking, etc
• Hence Complex Evolving Systems

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Reference on Complexity Theory

• Mitleton-Kelly E. Chapter 2 Ten Principles of
  Complexity Enabling Infrastructures in
  Complex Systems and Evolutionary Perspectives on
  Organisations The Application of Complexity
  Theory to Organisations
• Elsevier 2003, ISBN 0-08-043957-8

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Logic of complexity

• Shifts the emphasis from control to enabling
  environments
• Emphasises relationships
• How can change be facilitated through
  self-organisation, exploration, co-evolution,
  emergence, etc ?
• Based on co-creating enabling conditions social,
  cultural, technical, economic, political, etc

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• Tested with
• British Telecommunications
• BAe Systems
• Citibank, New York
• GlaxoSmithKline
• Ministry of Defence, UK
• Modernisation Agency of the National Health
  Service
• Rolls-Royce (Aerospace Marine)
• Shell (International, Finance, Shell Internet
  Works)
• World Bank, Washington DC
• etc

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Rolls-Royce Marine

• Acquired a set of small firms scattered
  throughout Sweden, Norway and Finland, which had
  gone through several mergers and acquisitions
• 2 years after the acquisition, still problems of
  communication between the Nordic UK employees
• Lack of integration
• The apparent cause was different national and
  business cultures

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Identifying the problem

• RRM conference identified two key issues
• 1. Clarifying roles and responsibilities
• 2. Increasing cultural awareness
• HR Director asked LSE Complexity Group to help
  and offered the assistance of the ALD team

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Research Process in RRM

• 16 volunteers from the RR ALD team became
  researchers for a period and conducted 33 out
  of the 44 interviews
• They were guided on interview technique and on
  analysing the data by the LSE team
• RR and the LSE researchers learned from and
  influenced each other during that process - they
  co-evolved
• Together they produced a set of recommendations
  that were turned into 12 work streams by RRM

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Tools Methods Used in RRM Project

• 44 semi-structured interviews
• LoM with 70 top managers
• Partial NetMap exercise
• ABM with HR team
• 2-day facilitated workshop with all interviewers
  and sponsors
• Introduction to Complexity
• Presentation to Board Conference
• Second set of interviews with ALD team for
  evaluation

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2-day Facilitated Workshop

• With 3 ALD teams LSE team sponsors
• 8 Themes
• Complicated structure
• Human behaviours
• Relationships
• Cultures
• Communication
• Matrix interfaces
• Leadership/role of central team/management
• Identity

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Findings showed that

• The perception of the problem, that different
  national and business cultures created lack of
  integration, was inaccurate
• There were other deeper issues that needed to be
  addressed urgently
• e.g. matrix structure
• new product development
• The cultural issue was often used as a smoke
  screen or an excuse

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Consequences

• Matrix structure splitting the customer facing
  and the operational business units imposed
  complicated procedures (submission to HO)
  Relationship with customers - affected new
  product development
• This would have had serious consequences if the
  problem had not been identified in time and
  addressed

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In Complexity terms

• Lack of integration
• Co-evolution was not encouraged
• Each part of the business was forging ahead in a
  separate evolutionary path
• Affect on new product development
• Blocked innovation and emergence
• Reduced exploration-of-the-space-of-possibilities
• Imposition of matrix structure
• Assumed that single culture was possible and
  desirable

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RRM Success

• RRM listened to the findings from the internal
  teams and the LSE team and changed its
  understanding of the problem
• Co-created an enabling framework, consisting of
  12 action streams, to facilitate integration
• Changed emphasis from imposed change to enabling
  environment

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The difference that the LSE and the project made
by HR Director (sponsor)

• 12 work streams being implemented

Myth dispelled National cultural diversity not a
problem
LSE Complexity Group specifically brought
Academic Rigour
Methodology and Analytical Tools
Complexity Thinking
Change in Emphasis
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References on Methodology

• Mitleton-Kelly E. 2003 Complexity Research -
  Approaches and Methods The LSE Complexity Group
  Integrated Methodology in Keskinen A, Aaltonen
  M, Mitleton-Kelly E "Organisational Complexity.
  Foreword by Stuart Kauffman.Scientific Papers
  1/2003, TUTU Publications, Finland Futures
  Research Centre, Helsinki, 2003
• Mitleton-Kelly E. 2004 An Integrated Methodology
  to Facilitate The Emergence of New Ways of
  Organising Conference Proceedings of the 3rd
  European Conference on Research Methodology for
  Business and Management Studies (ECRM) April
  2004.
• Papers on http//www.lse.ac.uk/complexity

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A CES organisation

• Facilitates (does not actively inhibit) emergence
  
• Encourages self-organisation
• Explores its space-of-possibilities
• Facilitates co-evolution
• Understands about degrees of connectivity
  interdependence
• Appreciates its distributed intellectual capital
• Fosters a collaborative culture

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A CES organisation

• Creates variability large
  repertoire of responses
• Able to cope in an unpredictable environment
• Not too organised and not too random
• Emphasises Enabling Infrastructures (not CC)
• Facilitates the emergence of new order
• - new ways of working and relating
• - new organisational forms
• - generation sharing of knowledge