Sunday, November 14, 2004

The edge of chaos 混沌邊緣

Surfing the Edge of Chaos 混沌邊緣

I read this book two years ago after being fascinated by the Chaos Theory and the butterfly effect on nature and mathematics. It gave me good insight on how the Chaos Theory is related to management studies. The topic came back to me when I saw recently a summary at Book Summaries Online of the CSTDI Cyber Learning Centre. The 10-page summary is quite comprehensive and gives a very good description of the main points of the book.

The scene is organizations being regarded as living organisms instead of machines. Thus four laws of nature from Chaos Theory are applied:

1. Equilibrium is death -When a living system is in a state of equilibrium, it is less responsive to changes occurring around it. This places it at maximum risk. There is also a well proven law of cybernetics - Requisite Variety - which states that when a system fails to cultivate (not just tolerate) variety in its internal operations, it will fail to deal with variety that challenges it externally.

2. Innovation takes place at the edge of chaos -In the face of threat, or when galvanized by a compelling opportunity, living things move toward the edge of chaos. This condition evokes higher levels of mutation and experimentation. The result is that fresh new solutions are more likely to be found.

3. Self organization and emergence occur naturally -When the right kind of excitation takes place, independent agents move toward what has been popularized as the "tipping point." New forms and repertoires emerge from the turmoil.

4. Organization can only be disturbed, not directed -Living systems cannot be directed along a linear path. Unforeseen consequences are inevitable. The challenge is to disturb them in a manner that moves directionally toward the desired state, then course-correct as the outcome unfolds.

The authors draw reference to Darwin. They go further to propose that the natural selection process come from selection pressure, that species do not evolve of their own accord. Rather, they change because of the forces, indeed threats, imposed on them from the environment. Such selection pressures intensify during periods of radical upheaval. The bottom line is that nature is more dedicated to proliferating life in general than to the perpetuation of any particular species. In a fair competitive environment, no organization has the ability to stay in a equilibrium. Change is the only way to stay alive.

The edge of chaos is a condition, not a location. It is a permeable, intermediate state through which order and disorder flow, not a finite line of demarcation. Moving to the edge of chaos creates upheaval but not dissolution. That's why the edge of chaos is so important. The edge is not the abyss. It's the sweet spot for productive change. But moving over the edge is to avoided.

The book extends the concept of fitness landscape from ecologists to the management area. The great plain is chaotic with customer defections, low margins, undifferentiated products, etc., while fit and successful organizations with their niches are represented as hills in the landscape. An organization grows and climbs a small hill to reach its summit. But in order to achieve greater height at another hill, it must first descend to the plain of chaos, get rid of its culture and build afresh. The journey is a sequence of disturbances and adjustments, not a lock-step march along a predetermined path.

One main point that defies traditional management theory is the trouble with optimization. Management likes to take the classic "blank sheet of paper" approach and optimize the inefficient system. This approach cannot anticipate every twist and turn in the execution phase. The law of unintended consequences reminds us that optimization seldom yields radical innovation. At best, it only maximizes the pre-existing model. It founders because efforts to direct living systems, beyond very general goals, are counterproductive. This seldom conforms to the linear path that we have in mind. This is why the misapplication of linear logic, i.e. re-engineering business processes, will inevitably fail.

The book proposes some guidelines in surfing the edge of chaos by disturbing but not directing the system.

1. Design, don't engineer.

2. Discover, don't presuppose.

3. Amplify, don't dictate.

There are more interesting points in the book. I recommend you to read the summary first, and if interested, read the book.